BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Freight Transport Sector Of Bulgaria

Bulgaria will take loans and provide guarantees for EUR815mn (US$1.02bn) in 2007, its first year of EU membership, for infrastructure projects financed by the bloc, the government said in October 2006. Five of the eight projects are part of a EUR7.6bn (US$10bn) investment plan aimed at fixing Bulgaria's dilapidated roads, railways, sewage and waste disposal sites and other infrastructure until 2015. One of the biggest items is a road upgrade for which Bulgaria will receive EUR380mn. Other deals include repairs to roads and sewage systems in small towns across the country. In fact, taking into account the gradual improvement of the highway system, in BMI’s newly released Bulgaria Freight Transport 2007 report, we conclude that freight carried by road will grow by an annual average of 7.0% in the 2007-2011 period.

A number of factors underpin this projection. We believe that tonne/kms will now start to increase, driven by improvements in both GDP and trade volumes, as the rate of decline of average length of haul slows significantly or stops. Bulgaria’s EU accession on January 1 2007, will be clearly supportive, helping link the country closer to continental road networks. Public-private partnership (PPP) models will help unlock additional investment funds for motorway construction. Plans are well advanced for a second US$303mn bridge over the Danube River, linking the country’s port of Vidin with Romania's Calafat by mid-2010. And the outlook for Bulgarian economic growth is encouraging, with GDP set to expand by an annual average of 5.5% over the next five years.

Looking across all freight transport modes, we now project airfreight to grow at the strongest pace (8.2% per annum), followed by inland waterways freight traffic (8.1% pa), oil and gas pipelines (7.2%), road haulage (7.0%), maritime freight (6.4%) and rail (6.2%). Taken together all freight, measured in million tonne-km (mntkm) will grow by an annual average of 6.5% per annum in 2007-2011, ahead of GDP.

The total value of transport and communications GDP will rise to US$6.82bn in nominal terms by 2011, representing 14.4% of Bulgaria’s GDP. The transport and communications sector employed 198,400 people, or 7.4% of the labour force, in 2006. Against the backdrop of a falling population, we see that figure reducing holding roughly steady to 2011.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Bulgaria’s Freight Transport Industry SWOT

Chapter 3 - Business Environment Overview

Europe Business Environment Ranking

Business Environment Ranking

Economics – Long-term Risk

Politics – Long-term Risk

Freight Transport Growth

Transport Infrastructure Growth

Regulatory Environment

Competitive Environment

Transport Intensity Index

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Red Tape

Labour Force

Chapter 4 - Industry Trends And Developments

Rail

Air

Sea

Pipelines

Chapter 5 - Industry Forecast Scenario

Macroeconomic Outlook

Table: GDP, Population & Output

Transport Outlook

Table: Bulgaria Transport & Communications Sector Data & Forecasts

Freight carried (domestic and international):

Chapter 6 - Country Snapshot: Bulgaria Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Foreign Trade Regime

Overview

Trade Agreements

Tariffs

Table: Bulgarian Imports By Category (US$mn)

Table: Bulgarian Exports By Category (US$mn)

Table: Top Export Destinations

Table: Export Trade, % y-o-y

Table: Top Import Sources

Table: Import Trade, % y-o-y

Chapter 7 - Market Overview38

Competitive Landscape: Multimodal

Company Profiles

Road

Infrastructure

Competitive Landscape: Road

Rail

Infrastructure

Competitive Landscape: Rail

Company Profiles

Air

Infrastructure

Competitive Landscape: Aviation

Water

Infrastructure

Competitive Landscape: Maritime

Company Profiles

Pipelines

Competitive Landscape: Pipelines

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Transport Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

Wages (ave labour force per annum), US$ PPP

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Europe Freight Transport Reports: Sample of Companies Ranked

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Analysis of latest projects across the freight transport sector – road, rail, air, sea, logistics – including market overview which provides an outline of the key elements driving development. SWOT analysis of the state’s business environment, transport sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of European Freight Sources

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BMI's European Freight Transport Reports are based on an extensive network of multilateral organisations, government departments, freight transport industry associations, chambers of commerce and company reports. Information sources include: