Municipal woes

Investors insist on faster services, better infrastructure and coordination from local authorities

The market’s macro framework is what defines the strategic decisions of investors whether to enter a country – economic growth, prices, price stability, legal security and other factors. However, the real problems which investors have to solve are closely linked to the work of various administrative structures but most of all – to the work of local authorities. This is where the most frequent problems occur in development. A lot of complaints by managers relate to the plethora of bureaucracy, slow services of poor and unclear procedures. 
"On the whole this is a very painful problem for the entire state. The main issue is the outdated computer systems and unmotivated staff," says Evgeni Vasilev, manager of real estate agency Arco Real Еstate.
The problem concerns everyone, but it seems as if it can’t be solved by the state only. Even the Law on Investments Promotion, which was supposed to give a hand to certain companies and projects because of their important role for the economy, is not giving them a 100% confidence as its use depends on the specific coordination among a number of departments that follow varied regulations.
"We can at least give an example for 50 cases which impede our work and actually concern legal matters," says Rosen Plevneliev, general manager of Lindner Immobilien Management, the company behind some of the largest private projects in Bulgaria like Business Park Sofia and Residential Park Sofia. BPS was the first certified first-class investment according to the Law.
Development of municipal infrastructure is just one of many examples. Even if the state makes financing these projects its priority, sometimes just objections of expropriations could block and even turn down given investments.
A representative of the local authority has outlined the problem in a similar way. Tsonko Tsonev, Mayor of Kavarna says: "As the completion of a number of investment projects and concomitant procedures depend on local authorities, and large-scale schemes and controlling processes are done by the state, I assume that we need a better synchronization between the two parties"
On the other hand, municipalities have quite a number of administrative processes which can be differentiated. The introduction of specific taxes regarding particular types of services is another example that large real estate developers have given. Thus, the person paying more money to receive a specific service will be able to do his work faster. "Some documents require a tax on express issues. I believe this tax is low and think that a higher tax should be added to all types of documents, but the time limit for this issue should not exceed 1 working day," says Evgeni Vasilev, of Arco Real Estate.
The municipalities’ inability to finance local infrastructure development has always been an issue, which is now being partly dealt with - developers asphalt streets and build pavements close to their projects and after that grant them to municipalities, which, on the other hand, have their own priorities.
"However, we are not developing only one or two buildings, but an entire complex of 35 buildings. There is no chance that the vision of this complex’s infrastructure will not interweave with the vision of municipal infrastructure," added Rosen Plevneliev. 
In the end, developers are highly unlikely to stop financing the development of public infrastructure. But in critical situations supporting priority projects will play the most important role for the attraction of investment capital. And this support directly requires that cooperation between the real estate business and local authorities is improved.

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Arch. Georgi Nikolov: Investments to be made in accordance with the property quality
Valeri Atanassov, executive director of Soravia Bulgaria: We are positive that new industrial and office projects will be needed
Tsonko Tsonev, Mayor of Kavarna: Better synchronization between municipalities and the state is needed
Evgeni Vasilev, general manager, Arco Real: Faster administrative services even at higher cost
Mihail Chobanov, general manager, Bulgarian Properties: Residential policies should stimulate young people and keep them in Bulgaria
Tsvetelina Taseva, executive director, Address Real Estate: State interventions should be precise to the maximum level
Toni Tonchev, general manager of development company Torin: Let’s take advantage of the crisis and put the branch in order
Mauricio Mesa Gomez, regional director, Bulgaria and Romania, Hercesa Internacional: VAT on property in Bulgaria is too high
Stefan Sharlopov, owner of Sharlopov Hotels: We have to be creative in the time of crisis
Bogomil Manchev, executive director of Risk Engineering: Completing large-scale infrastructure projects will bring good results.
Kalin Peshov, executive director of Glavbolgarstroy: In one-year time the market will stabilize
Lachezar Bogdanov, economic analyst, Industry Watch: Reforms to facilitate investment have to continue
Georgi Angelov, senior economist at Open Society Institute:Reasonable macro policy is what prevents economies from serious crises
Rosen Plevneliev, general manager of Lindner Immobilien Management:Factories have to come to the front.