Business contacts have been established
as well as interest has been shown in zones of similar
activities in the Middle East, Slovenia, Germany, etc.
Read the brief summary introducing Varna Transit Trade
Zone or go directly to the project Development of
the Varna Port and Transit Trade Zone Varna.
THE TRANSIT TRADE ZONE
The project for a Transit Trade Zone has been worked out in conformity with the effective Customs Law and Regulations for Applying the Customs Law in the part concerning the legal environment for free zones in the Republic of Bulgaria.
The aim of the project is to prove the great necessity for establishing such a zone in the Varna Region in view of the present economic situation in the town and the region and the developing flow of cargoes, as well as the organizing of the international transport corridors numbers 4,8,9 and 10 and the connections with them.
LEGAL REGULATIONS FOR THE FREE ZONES IN THE REPUBLIC
The whole legal environment for the free zones is created by the following legal acts:
1 Decree 224/1987 and The Rules and Regulations for its Applying;
2 The Customs Law - Part III, chapter 19 and the Regulations for Applying the Customs Law- Part V, chapter 47
3 The Excise Law, § 2; the Value Added Tax Law, art. 59; Directions of the Central Taxation Directorate - 06/12.02.1996; Directions of the Central Taxation Directorate - 35/15.12.1993 to the Ministry of Finance; Directions No D-24-05-0006/02.06.1995 of the Ministry of Finance concerning the usage of sites in the free zones; Agreements between the Governments of the Republic of Bulgaria and the Republic of Romania and the Republic of Turkey for mutual cooperation in the customs activities.
To summarize, according to the Bulgaria Customs Law,
all kinds of activities and services of industrial and
trade character are allowed in the free zones and warehouses.
CHARACTERISTICS OF THE LOT WHERE THE ZONE WILL BE
The lot is situated in the Western industrial
region of Varna in an area known as "The Island'. The
territory of the lot is of 103 000 sq.m. with a direct
outlet, along its whole length, to the Lake Channel.
The boundaries of the lot are as follows: to the East
- the protective zone of the Asparukhov Bridge, to the
South - a Lake channel, to the West - the Varna Lake,
to the North - a secondary asphalt road. The lot is
very well transport bound by road, railway and a good
possibility for constructing an approach to the sea.
Due to the high grade of the set up engineering and
communication infrastructure of the Island, as a positive
factor, and some limitations ensuing from the geological
characteristics of the terrain, as a negative factor,
the territory of the Island is most suitable for developing
of warehousing activities in light construction middle-height
INVESTMENT AND CONSTRUCTION STAGES
It is proposed
that the Zone be established in three Stages. The basic
purpose of this proposition is to set up an engineering
and construction infrastructure adequate to the activities
and services rendered by the Zone.
Stages 1 and 2
- Building of the engineering infrastructure;
area of 1200 sq.m., furnished and technically equipped;
- Under-roof Complex of warehouses, measuring 120x48x10
m or 5760 sq.m. - Warehouse Sector 1;
- Under-roof warehouse,
measuring 20x48x10 m (one building of Warehouse Sector
- Open-air storage area of 60 000 sq.m.;
facilities and 40 tables cafeteria;
- A conference room
- Walling of the Zone;
- Connecting the Zone to the
On completion of Stages 1 and 2, the
Zone will immediately start functioning and accumulating
In the event that the basic goals of the Zone are reached
on completion of Stages 1 and 2, the investment program
of the Zone will be continued by Stage 3 and construction
of a new terminal for loading and discharging of cargos
and containers. On account of the fact that this is
quite a capital-consuming investment, Stage 3 is of
rather long-term perspective importance.
ACTIVITIES AND SERVICES TO BE RENDERED BY THE ZONE
- Offering for rent under-roof warehouse space .
for rent open-air storage area
- Offering for rent office
- Renting space for industrial production, packing
and repackaging activities
- A range of loading and
- Banking and insurance activities
- Other supplementing activities
THE NECESSITY FOR A TRANSIT TRADE ZONE
determining the necessity for a transit Trade Zone in
the Varna region can be summarized in two main groups:
A/ Financial factors
- In view of the fact that the
financial institutions in the region do not manage to
provide the necessary credit resources for the development
of the small and medium size business, any form of postponing
the customs and taxation dues would bring a stimulating
the development effect to the industrial unit helping
it to synchronize the realization of the goods with
the terms of taxation,
- The establishing of joint industrial
units is also prevented by the chronic lack of investment
and working capital. Most often the foreign partner
is ready to offer a commodity credit for production
resources to a local trade or industrial unit but the
local businessmen are unable to pay the due taxes on
import of the goods. In this respect the Zone is the
suitable place to start a production process to the
completion of the product and its export to neighboring
- A traditionally developing branch as ship
repairing is also affected by the financial factors
due to the long-term supplies of spare parts and the
value added tax collected before their realization.
B/ Factors connected with the logistic capacity of the
- Varna is a traditional port center having the
necessary transportation infrastructure for meeting
the cargo flows and distributing them along the basic
transport corridors. The international experience points
out that for activating the cargo flow a broad specter
of possibilities should be offered, including a Transit
Trade Zone. With the establishing of the Zone the interest
in the regional transportation and port infrastructure
is expected to grow.
- Port Varna is an important transportation
and forwarding center as it is geographically situated
at the end of the Trans-European Corridor No 8 and is
well bound by road, railway and sea communications.
DIRECT AND INDIRECT INFLUENCE OF THE TRANSIT TRADE
ZONE OVER THE EMPLOYMENT PROCESSES IN VARNA REGION
1. Direct influence over the employment of the population
With regard to the intensity of the investment program
and based on the planned construction and other activities
necessary for the complete structuring and putting into
operation of the whole Complex, we hope for a growing
tendency of employment.
2. Indirect influence over the employment of the population The establishing
of the Transit Trade Zone will inevitably attract foreign
trade representatives and branches of foreign companies
aiming at rendering services to the industry and trade
in the North-Eastern Region of Bulgaria thus enhancing
the economic activity of the Region.
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of the Varna Port and Transit Trade Zone Varna
Project title: Development of the Varna Port and Transit Trade Zone Varna
The actual trends in logistics, distribution, value added services, foreign direct investments will be analyzed. The objective of this stage is twofold:
- to analyze the trends and strategies of shipping lines and shippers
- to analyze the distribution centre strategies of major companies
The second part of phase 1 is to conduct interviews with different major companies, present in the area or looking for investment opportunities, in order to share their experience on the demand and supply side.
Phase 2 will asses the supply side
Quick scan of the actual situation and service offerings of the region and identification of competitor locations. The competitiveness of Bulgarian ports will be analyzed.
Benchmark with 2 best practices: Hamburg and Antwerp analyzing:
1. service offerings
2. transportation possibilities
3. structures and organisation (privatisation) port type to be applied
4. administrative procedures
5. customs regulations
6. fiscal issues
Step 3: SWOT analysis: Strengths, Weaknesses, Opportunities and Threats at three levels: the
Varna region, the Port of Varna and the Free Trade zone;
Step 4: Financial and technical requirements for the service improvement and the new service offerings
Phase 3: Will asses the local needs
Objectives of "Transit Trade Zone Varna"
Defining the objectives for the "Transit Trade Zone Varna"
Assessment of demand and supply against objectives
An analysis will be made to identify the local service and investment opportunities. This analysis
will be matched with the local needs. The potential of an intermodal Hnk with West European
ports will be investigated. Advice on the possible privatisation efforts of Bulgarian ports will also
Recommendation on target activities
Target activities will be selected based on previous step.
Phase 4: Strategy development
Local products improvement
Optimising the existing service offerings
Development of new products and services
After matching the demand and the supply with the local needs an improves local product will be
Implementation plan Intermodal link Flemish Ports - Port of Varna
Outlining of a new market approach
Promotion, marketing and incentives plan.
Action plan for the attraction of investors and customers
Description of the qualifications of the project partners
APEC was set up to help developing countries expand their port facilities, develop their skills and introduce new port related technologies. To this end, APEC organises port infrastructure projects, sends experts on short and medium term missions, and provides training in the concerned port countries in addition to programmes at their training centre in Antwerp. Founded in 1977 with support of the Belgian Government, APEC as an organisation represents the combined know-how of the Port of Antwerp, with the Port Authorities, the Port of Antwerp Promotion Association (ASSIPORT), the Antwerp Universities, the Nautical Academy of Antwerp, public and private institutions and the complete spectrum of industry. Since the beginning of last year APEC-Antwerp Port Consultancy Ltd. is integrated within the Study Department of the Antwerp Municipal Port Authority.
PricewaterhouseCoopers' specialized division, PwC Consulting - PLI, offers unequalled expertise in the field of port and waterborne related strategic advice, ports marketing and transaction management (organizational structure: see picture on the next page). For more than thirty years, PwC-PLI has assisted numerous companies and public authorities on strategic assignments: Port Authorities, Port- Established Industrial Companies, Shipping lines, Stevedores, Global Logistics Providers, as well as Transport Ministries and international institutions as the World Bank, European Commission, OECD. Depending on the specific needs of our clients, our world-wide assistance offered can address:
o Optimisation of Port Structure, Management and HR;
o Assessment and Improvement of Competitive Position;
o Monitoring of External Developments;
o Optimisation of Calls and Strings:
o Feasibility and (Re-) Financing Studies;
o Port Business Planning and Due Diligences;
o Optimisation of Port Estates;
o Identification of appropriate partners for Port Privatisation projects;
o ICT and e-Business Service Offerings in Ports.
We believe that we are the best-placed consortium of firms and consultants to advise the Bulgarian Authorities and the Flemish Government on the future development and commercial exploitation of the Port Varna and the set-up of a new Intermodal Link with the Flemish Seaports, for the following reasons:
o Combined our consortium has extensive institutional experience of Ports Restructuring and Business Park Developments;
o We have a demonstrated track record of acting as lead financial advisers on ports privatisations and concessions in the UK, Australia, Canada, Mexico and Thailand;
o Our team includes advisers who either led or played a significant role in many of these projects: Fred Vossen (Belgium), Patrick Uyttendaele (Belgium), Martine Debel (The Netherlands), Stephane Jacobs (Belgium), James Smyth (UK) and Ivo Koeklenberg (Belgium).
o Our consortium combines the strengths of the world's leading advisers on ports restructuring and transport privatisation and ports operations with one of the leading port engineers of the Port of Antwerp.
The aim of the project is to maximise the opportunities of the port of Varna and the Fee Zone. Following problems will be addressed:
Improvement of the actual service offerings in the port: warehousing, logistics, data processing, management, organization.
To develop new products and services to and from ports
Development of additional value added services and new transportation possibilities, e.g. intermodal
link between Varna and the Flemish ports
To develop a new market approach:
Promotion, marketing, incentives towards existing and potential customers and investors.
Action plan in order to attract customers and investors
Varna district is situated in the north-eastern part of the Republic of Bulgaria. The area has a population of 445 200, the town of Varna itself 346.000 being 70%. The district generates 5,4 % of the GNP of Bulgaria. Te private share of the economy is above 50%. The economic profile of the districts is as follows: industry 40%, transport 25%, tourism 10%, trade 15% and construction 10%. The main sectors characterizing the structure of the economy are harbor activities, seafaring, ship-repairing, chemical industry, machinery construction, textile industry, food processing industry furniture production, building and agriculture.
The Bulgarian Maritime Company owning tankers, container carriers, mass and general cargo carriers provides 30% of the district income.
The harbour of Varna is directly linked to Russia. Georgia and Ukraine by ferry boat and ro-ro connections. It is also linked with Central and Western Europe through the railway link between the Russe-Varna line and the Rhein-Main-Danube corridor.
The export activities are primarily oriented towards countries of the Union of Independent Slates, the Middle Cast and South Africa.
The Varna region is very
dependent on transportation. By improving the port facilities
with the development of the free trade zone and intermodal
links it will facilitate transportation and value added
activities in general. As a result:
1. The direct employment and added value in the port and distribution sector should increase significantly. More cargo will transit through the port and pass through the free trade zone;
2. Transport related services like banking, insurances will increase their activities;
3. The area will be more attractive for foreign investors creating new jobs and cargo flows;
4. Cargo exchanges for the Flemish ports.
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