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Sunny Beach JSC requests immediate legislative changes

The Ineffective enforcement of the laws unlocks all the crises in the resort

Sunny Beach JSC insists on immediate legislative changes that would regulate strict rules in trading activities, temporary sites and the way the infrastructure in the tourist complex is managed. The imperfections in the laws and the inability to apply the legislation effectively unlock all the crises and raise tension in the resort, said Zlatko Dimitrov, CEO of the company, at a working breakfast with journalists. Dimitrov took office as an executive director of Sunny Beach JSC in November, this year, after being a Chairman of the company’s Board of Directors for two years. He is determined to continue the current policy of imposing order, legality and security in our largest resort, despite the opposition on behalf of some of the hotel owners. The balance of the last season shows the effectiveness of the measures taken so far. Their legality is proved by a resolution of the Supreme Administrative Prosecution Office, under which all security measures, monitoring regime and transportation introduced in Sunny Beach are lawful.

In order to organize a successful tourist season in next year too, the company's management needs legislative support as well. Its proposals for law changes are addressed to the relevant government institutions, and several meetings with their representatives were held.

The change in ZUT (Law on Territory Planning) and the illegal sites

‘We consider the implementation of the proposals indispensable, and even very late’, Zlatko Dimitrov said. The most - pressing problem of all tourist resorts in the country is the correct regulation of the commercial activities and the temporary sites. There is no legislative will for its settlement and the law enforcement is cumbersome and ineffective. Over the past 15 years hundreds of illegal sites crowded in Sunny Beach, their number now exceeds 800. Huge restaurants are rife in the central squares and gardens, kitschy street-stalls and shacks form insurmountable wall and prevent the access to the beaches. Although they are strictly illegal, they continue to work undisturbed and their owners do not pay rent. The removal of the illegal buildings has always been opposed. It is disadvantageous for some business circles, who want to gain illegal profits from the chaos. The existing legislation does not help for establishing order. Sunny Beach JSC offers not to enforce article 56 of the ZUT (Law on Territory Planning) for the 7 resorts in the country because of their special status. The permits for placement of temporary objects should be issued according to in advance approved by the MRRB (Ministry of Regional Development and Public Works) schedule, detailing the size, materials and the method the objects must be fixed and fastened, regardless the ownership of the land /schemes are now required only for state and municipal land/. The company wants to have filled in the ZUT (Law on Territory Planning) an outright ban on deployment of movable objects on properties where construction has reached the limit of structural indicators. If the objects could lead to damage to the green areas they also should not be authorized. The Black Sea coast law should provide an explicit prohibition on placing establishments offering food on the beaches, with the exception of trade with bottled drinks and packaged foods.

The company management insists too on a precise definition of "movable" objects. In order to create a harmonious architectural environment, the Ministry must approve a scheme for a unified vision of all the temporary objects. For years now Sunny Beach is filled with different by style, rusted and rotten sheds of the type "country custom market," creating a repulsive appearance of the complex. The company can’t cope with them, because the law makes no distinction between "construction" and "movable” object. This leads the court to decide that a rusty shed is actually a "building site" and the order for its removal to be declared null and void.

According to the proposal of the joint stock company, once approved, the scheme for the temporary objects can not be appealed and changed. The issuing or not issuing a permit to place an object could not be disputed too. Only parts of the scheme involving the stakeholders will be a subject to appeal.

Sunny Beach JSC wants a simplified procedure and short terms for removing the illegal sites. To avoid spreading responsibility between municipalities and state supervisory authorities, the company offers RDNSK (Regional Directorate for National Construction Supervision) to be the only authority in power.

The streets of Sunny Beach as well as those in all major towns in the country are blocked by a particular category of points of sale the Bulgarian legislature refuses to deal with. Carts, places for cooked corn sale, punching bags, tables and shelves for fruit, glasses, balloons and more hardly fall under the impact of the law. They are mobile, fast and can change their location many times. The Company's management believes that by non-compliance with the general trade system, these traders must be considered violators of the public order and become subject to fines and property forfeiture.

Zlatko Dimitrov is convinced that only with legislative changes and their strict application the state will be able to hold its line of conduct for management and development of the resorts. The Union of the Bulgarian Architects agrees with the offers for ZUT (Law on Territory Planning) changes. They are included in the summarized offers for changes in the law made by the SAB (The Union of the Bulgarian Architects) and submitted to the Regional Ministry.

To ensure reliable support of the infrastructure in the complex Sunny Beach a change in its status from urban village to a resort of national importance is offered too. This will enable the tourist tax to be collected in the state budget and then reinvested in the infrastructure of the resort.

Season 2011

Despite the economic crisis and the opposition on side the supporters of the chaos in the complex, the company's management succeeded in providing safe and peaceful stay for the tourists last season. In the summer 2011 Sunny Beach - East, whose infrastructure operator is the joint-stock company of the same name, started to become really a modern European resort and to take care of its impaired image. A special scheme for deployment of the commercial sites, consistent with the current ZUT (Law on Territory Planning) and Nessebar municipality was developed.

Monitoring regime of access to the alleys and the hotels in the complex was introduced that ensures the safety of the holidaymakers. High-tech control systems with optical connectivity track the traffic at the 8 checkpoints and the key intersections, and assist the police. Optical infrastructure provides to the owners of objects quality communications services. The company plans to build a wireless internet connection, available to all tourists in the resort too.

In 2011 a new transport scheme was adopted, that ensured smooth running of the cars and the tourists in the resort. The access of vehicles to the bikeways was restricted as well as the parking of vehicles on the sidewalks. Three new parking lots with 160 parking spaces, 818 parking spaces for SMS parking and 130 places for taxi ranks were set up. Each of the taxis had a distinctive sticker and each of the drivers - shirt with the logo of Sunny Beach JSC.

The introduction of the new transport scheme by Sunny Beach JSC failed to meet all its objectives. According to preliminary plans, the parking places in the Blue Area should have been 1122. Zlatko Dimitrov said the reason is that on many of the hotel parking lots there are commercial objects and guests are left without the possibility to park their vehicles. To ensure maximum comfort of holidaymakers and maintain good relationships with the hoteliers the joint-stock company has reduced the number of the parking spaces in the Blue Zone by 304.

Sunny Beach - East becomes visibly more attractive and greener. This spring there were planted 5,470 new ornamental shrubs, the lighting in alleys was replaced and the curbs are now compliant with the requirements for access of people with disabilities. The management plans to restore the previously existing floriculture unit in order to ensure the maintenance and the landscaping of the alleys in the complex. The old conservatory will become a modern cultivation base for the cultivation and storage of all types of ornamental plants, including cut flowers. The new facilities will be available to hoteliers and restaurant owners for winter storage of portable plants.

At the beginning of the last tourist season the emblematic for the complex central bridge was restored. The company invested 350,000 leva in its reconstruction and in this way gave back to the visitors their favorite place for walks, abandoned and even become dangerous in the recent years. The bridge enables the local people to revive a basic livelihood and provided to the holidaymakers the opportunity to go for a row with a boat and to travel by sea.

Sunny Beach JSC is the owner of the material-technical base in Sunny Beach - East with a balance value of 55,451,000 leva and valuation of the assets equal to 110 million leva. The company manages a significant infrastructure and in order to change the resort to a higher class tourist destination while at the same time optimizing the maintenance costs, it applies different techniques permitted by the law. This year it proceeded to cancellation of the valid till year 2010 contracts that have negative impact on its financial interests.

To reduce the costs, hoteliers, restaurateurs, retailers and traders were involved in the maintenance of the infrastructure. During the first nine months of 2011 Sunny Beach JSC realized savings in its activities expenses equal to 2,739,000 leva.

Management of the resort

The entire maintenance of the complex is provided by the operating revenues of Sunny Beach JSC and its management strives to increase them. The owners of hotels however do not understand this approach. For years now they refuse to pay the set in their contracts infrastructure fee. "I understand their disagreement with the method of forming the tax, maybe we have to find a new formula", Zlatko Dimitrov said. The hoteliers are frustrated too by the fact that they have to pay for infrastructure but the other businesses that operate within the complex don’t. The future statute of the infrastructure of the complex is discussed in the Privatization Agency and the after privatization control too. ‘It is out of the question to give it away to Nessebar Municipality’, Zlatko Dimitrov said.

This year the company plans to raise at least 50% of the due infrastructure charges - 2,487,000 leva. The collected amount however equals to only 315,000 leva of which 138,000 leva are taxes for year 2011 and 177,000 leva for previous years. However, the financial statements show a revenue growth. In the first nine months of 2011 they were 883,000 more compared to the same period of 2010. The greatest increase is in the amounts collected by the monitoring regime in the complex - with 207,000 leva more than the last year.

Sunny Beach JSC managed to reduce its net loss to 3,300,000 leva. The nine months of 2011 the company ended with a loss of 1,623,000 leva compared to the 4,932,000 leva for 2010 This is the evidence that the measures taken by the Board of Directors are effective and this puts an end to the trend of false accounting and constant accumulation of losses. Sunny Beach JSC is a public company with 75% state share and its overall financial situation is important for the state as well as for its minority shareholders.

12/15/2011