Venelin Terziev is a member of the Chamber's Board of Managers and heads the Sofia Regional Representative Office of the Bulgarian Building and Construction Chamber

If a public organization keeps the company register, corruption in Bulgaria will decrease considerably, says the head of the Sofia Regional Representative Office of the Bulgarian Building and Construction Chamber

Declaration in support of the Building Act was sent to the Minister of Regional Development and Public Works Asen Gagauzov by the president of the Steering Committee of Club Journalists Against Corruption Mrs. Reneta Nikolova.

It appeals for the urgent passing of this normative act, drafted by the Ministry of Regional Development and Public Works.

“We consider that building, one of the most substantial and rapidly developing sectors of the Bulgarian economy, requires a clear regulation,” the declaration says.

The adoption of a Building Act will restrict the grey economy and will have a strong anticorruption effect, Club Journalists Against Corruption further stated.

The organization declared its support to the efforts of the conscientious and responsible business for clear rules, equality and transparency in the sphere of building and construction, which would guarantee and protect the public interest.

Club Journalists Against Corruption is a national organization, uniting over 160 journalists and lawyers, with seven regional structures.

Venelin Terziev was born in 1965. He is an economist. Graduated in International Economic Relations in 1989. By concurrence of circumstances he took up building in 1991, and SD Viana OOD, the company he runs is established on the market. V. Terziev won the Building of the Year 2003 Award for the shopping center “Alexander” constructed in Vitosha Blvd., Sofia. He has executed many projects in the development of balneological complexes: Stryama Hotel in Banya, Karlovo region, in Hissar, in Burgas Mineral Baths. He is head of the Sofia Regional Representative Office of the Bulgarian Building and Construction Chamber and is a member of the Chamber's Board of Managers on a national level.

Mr. Terziev, the passing of the Building Act is pending. In the past month, various accusations were made against the Bulgarian Building and Construction Chamber and the bill. What worries you in these attacks?
We are worried about the way the bill is seen. BBCC is the largest public organization in the building sector. We have the best structure, we are the only one recognized by related international organizations. What is more, we are the organization which worked longest, 15 years, for the passing of such a law. The settling of the builders' statute or who has the right to build in Bulgaria as a legal or physical person was started in 2001 with the adoption of the Law on Development of the Territory (LDT) in one sentence: that this will become a fact when a law regulating this activity is passed. Since 2001 the BBCC has continuously been trying to carry through such a law, but we did not find the necessary support, mostly on the part of the ministers of regional development and public works. I should thank the present minister Asen Gagauzov for his understanding of the problem and its significance for the state and for taking steps towards its forging.

What are actually the problems in the branch?
In the building and construction market in the territory of Bulgaria reigns complete chaos and misrule in the sense that anybody who wishes may build. There are no legal restrictions, as long as you are registered in court. This leads to expansion of the grey sector in our branch, which is detrimental enough to the state, but also reflects on us as economic entities. When we participate in a tender, we find ourselves at a disadvantage to companies that don't pay their taxes, not even social insurance for their workers. It has come to the absurdity a company registered only a month ago to win public procurement contracts worth millions of levs, which is very disturbing.

If a builder makes a mistake, he jeopardizes the life and health of thousands of people. We witnessed this after the earthquake in Turkey. A week after the disaster we tried to help our neighbors. We made a big tour of the most stricken areas and we saw that an unregulated market brings on poor quality and dangerous construction. So, the purpose of the BBCC has always been to have a regulated market, to restrict the grey sector, to become equal economic entities on the national building market and to improve the quality of the building product.

Was the absence of an adequate law the only problem?
The absence of a law is an important prerequisite, perhaps not the only one. I am convinced that a clear legal regulation is needed in construction, which is one of the major and most rapidly developing sectors of Bulgarian economy.

Will the new law have a strong anticorruption effect? Corruption in our country at the moment is high, the EU says so too, and for construction we hear legends.
Of course, it will have an anticorruption effect. In the first place, it will diminish the grey sector which takes the liberty to corrupt civil servants, etc. Secondly, in the bill we have envisaged that the law shall be enforced by a public organization for several reasons. Corruption in the state will be reduced significantly if a public organization keeps the building and construction register, as the law provides. Corruption will vanish because we are also competitors.

Is the Register so important?
The most important thing is to do away with the grey sector, because if there is a Register everybody will come out in the light. Everyone engaged in construction will have to be so kind as to register. It is generally commented that in Bulgaria there are more than 20,000 building companies. But this is not so. According to our estimates, they are between 3 and 5 thousand.

Why this huge discrepancy in the figures?
In the court registers everyone may record anything he likes. For instance, when my company was incorporated, in its scope of activity 16 years ago I have recorded advertising, but I have never been an advertiser. The practice was and still is to write “anything not prohibited by the law”, which may mean a whole lot of things. Thus they have arrived at the figure of 20,000 building companies in the country.

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There are comments that if the bill is passed in its proposed form, other companies will not be eligible even for repair works without the approval of the Building and Construction Chamber.
This is not correct. The law is by no means discriminative. The registration we want to introduce with it is a minimal effort on the part of the companies wishing to operate in construction. Clear and exact criteria for registration are set forth, an option for appeal in court is provided. The requirements to the registration applicants are minimal. Under LDT there are several kinds of projects. We have grouped them in two groups. Registration in the first group, which allows you to work on projects of category III, IV and V, is for residential buildings, smaller projects. For this purpose you need only have a registration, court and tax registration, BULSTAT and to prove that you have an appointed engineer.

Is it compulsory to be a member of the Chamber?
No, and this sets our draft apart from those of the other branch organizations. We say that it is not compulsory to be a member of any public organization in order to enter the register of builders in Bulgaria. Furthermore, we allow for the right of every individual – economic entity or physical person – to associate with other public organizations at their free will. No one should be forced into membership in a public organization. For years the BBCC has not been financed solely by membership fees, unlike all other public organizations in our sector. We have created modern techniques, drawn on the experience of related international organizations. The membership fee at the BBCC is a small sum, a gesture of affiliation on the part of its members.

Another accusation against the BBCC is that it has become almost a monopolist in the branch.
We are not monopolists but we have many members. We are the largest building organization with over 1400 members, the Sofia office alone has over 400 members. Therefore the most experienced and prestigious builders are in our chamber. We do a fairly large volume of construction and assembly works in the territory of the country. This is not monopoly, because every one of us, including myself 10 years ago, has become a member of the chamber at one's own will. I don't see why a public organization should be treated as a monopolist if so many high-quality companies are members in it. Our structure is very democratic as our members range from big construction companies to the smallest ones, such as one-man companies of 5-6 workers. At a general meeting they all have the same weight – one vote.

There is talk that this law will kill many small companies.
This is ridiculous. Firstly, the bill is commented upon by people who have not even gone to the trouble of reading it. It is clearly and precisely prescribed who is entitled to work and how, how the registration will be done. The assertion that the small companies will not be able to operate is simply not true. The requirements are minimal. To construct projects of category one and two, such as ports, airports, nuclear power stations, a turnover of 1.5 million BGN is required, capital stock of 200,000 BGN, at least 50 people on the payroll, whose wages have been paid for the preceding year. These conditions can be met by smaller companies, e.g. sole proprietors with personnel of 30-40 or 50. With the registration rules, these could register for big projects too. You call this discrimination?

Would this law enable our companies to be sufficiently competitive to powerful western companies which are coming to Bulgaria?
The bill provides equal rules for the Bulgarian and foreign firms. Those who wish to operate in Bulgaria will have to be registered, and consequently meet the requirements. Henceforth we are all in the light and fair competition will give advantage to some or other on the market.

Why should the registration of building companies be done by an organization rather than by the regional ministry?
In our opinion it should be done by a public organization. Thus corruption and bureaucracy will be reduced, and it will be cheaper for the state as it will not have to go to expenditure under this law. We proposed the Register to be kept by BBCC, then the accusations followed.

Why do you think the BBCC should keep the Register?
For several reasons: First, we are the oldest organization, we have established our internal rules and norms, which have proved to be democratic, our members enjoy equal status. Second, BBCC is internationally recognized, we maintain contacts and exchange visits and experience with many related branch organizations in Europe and Asia. We are particularly close with the Turkish and the German building and construction chambers, we have experience in joint projects with them. With the German we have even set up professional centers. Third, we have the best structure – offices, staff, computers, programs, in all large cities in Bulgaria, and now we are spreading to smaller ones like Dupnitsa and Kozlodui. This structure would ensure the cheapest registration cost. We make it a point that our members, and everybody for that matter, receive registration in the easiest and cheapest way possible. Why should anyone pay 1000 BGN for registration if he can be registered against 10 BGN. This stand of the BBCC should be carefully considered by the MPs and the Ministry, because indeed in this country we should spare every lev. If the Register is undertaken by any other or a new organization, we are sure the process of enforcement of the law will become longer and more expensive.

So, the access of companies to construction shall not be restricted?
It is evident from our draft that there is no way anyone would be refused if he meets the minimal requirements. In the event of refusal, the organization in charge of the register may be sued. There is no monopoly, the law will not give rights to the bigger companies to the exclusion of the smaller ones or vice versa. I want to make it clear that we are not talking about a building and construction market, but about who will be able to practice the profession of builder as a company or physical person.

Do you think the bill complies will all European requirements?
Absolutely. We made the draft on the model of the basic European legislation. Support should be given to the efforts of the conscientious and responsible business for clear rules, equality and transparency in the sphere of building and construction, which would guarantee and protect the public interest.

When is the bill expected to enter the plenary hall?
This depends on the regional ministry. It is good they have undertaken a socially useful task. First the bill has to be reviewed by the Council of Ministers, then by the parliamentary committees, and then go for first and second reading. If the importance of this bill is realized, I think it could be passed by end May. This law is requisite, and since by the end of the year we have to be ready to join the EU, we should have our regulations according to the European standards.