1. Public – Private Partnerships in Bulgaria: First Steps
Round table CREATING SUCCESSFUL PUBLIC-PRIVATE PARTNERSHIPS June 13, 2007 Federal City Council, Washington D.C.
Ruslan Stefanov
Coordinator, Economic Program

2. Overview Why PPP? Economic and governance issues
Doing PPP in Bulgaria: recent experience
What PPP for Bulgaria: models and best practice
Lessons from the U.S. and the road ahead

3. The case for PPP regulation in Bulgaria
The Bulgarian economy
virtually no capital investment in public services and infrastructure for years
the average asset size of Bulgarian companies is two to ten times smaller than European peers
30 – 50% of new capital formation comes from abroad
Governance – introducing more horizontal accountability
European Union accession – a window of opportunity to leverage private funds, incl. int’l investors

4. The grey economy is declining but remains LARGE

5. Less companies give bribes Share of Bulgarian companies that have paid a bribe for the following public services (%)

6. Bribes particularly damaging in public procurement
Public procurement is a channel for political and administrative corruption in Bulgaria
The direct fiscal damage of corruption in public procurement
2.4% of GDP = $890 million in 2006
Equal to what the country will receive in annual EU funds in 2007 – 2009
The indirect economic damage:
Damaging free market functioning
Reducing competition
Increasing transaction costs for the business and the government
Will EU funds money have an impact on the economy? How?

7. Recent PPP experience in Bulgaria
Positive (Sofia Economic Council) though small
Negative (Nuclear Power Plant, highway concessions, etc.) though large
Lack of PPP policy and/or regulations. Existing channels are rigid and do not allow partnership.

8. Lessons from the U.S. and the road ahead
The Federal City Council in D.C. and the Allegheny Conference in Pittsburgh
The ‘visible’ ingredients of PPP (rules and regulations)
The ‘invisible’ ingredients of PPP (social capital and experience)
Making the best of U.S. experience – thinking locally, acting globally

9. THANK YOU!