Comment by Emilia Milcheva:
Bulgarian politicians are burying the miners and energy workers from the Maritsa Basin alive - leaving them like those buried in an earthquake, as much as they can breathe under the debris of the collapsing coal industry. And it is gradually dying because of the expensive electricity it produces, and without a guaranteed alternative for those employed in it, who were lied to by loudmouth politicians that they would work and receive their high salaries until 2038.
The outrages with which the finale of the 50th parliament will be remembered before the start of the election campaign confirmed what these people already know - for the fourth year in a row, politicians have been unable to produce effective solutions related to the Green Transition. A few days ago, some political forces tried to squeeze into the last working day decisions that they had not dared to adopt until now - and they did it cowardly and silently. Others immediately took advantage to raise a pre-election ruckus - populists do not fail to present themselves as saviors.
The farce is over, the problem remains
In the end, it turned out to be a farce, and the problem of how the miners will receive their salaries until the end of the year - and even after that, was not resolved. This means that they will once again rely on public funds - loans from the budget and from the Bulgarian Energy Holding (BEH). Nearly 8,000 people work in the state-owned “Mines Maritsa Iztok” (6,000 people) and TPP “Maritsa Iztok 2” (about 2,300 people). There is no notification from the European Commission (EC) about the votes voted by parliament in April this year. 250 million leva per year from the state budget for a period of 4 years for the reclamation of the mines. The populist move was approved without the state mines having presented data on how many acres of disturbed terrain they have reclaimed so far and whether they have complied with their obligation to make annual contributions for this purpose, as they are concessionaires of coal deposits until 2040. And the concession is for an area of nearly 474 thousand acres and with an option to extend it by 15 years.
A report by “Mini Maritsa Iztok” EAD for payments under the concession for 2022, a record for coal and electricity production, shows that the contributions are for nearly 16 million leva. “For the period 01.01. - 31.12.2022 concession contributions to the Ministry of Energy in the amount of 15,758 thousand leva have been paid”, the document says.
If in their last working session the deputies had voted on the schedule in the Roadmap for climate neutrality - for the phased withdrawal of coal-fired power plants by 2038 and the introduction of “green”, the Recovery and Sustainability Plan (RSP) would have allocated 500 million leva for reclamation. But this money would not have been given to “Mini Maritsa Iztok”, but to a specially created company for the purpose, which would finance the activities carried out by the company to restore the terrain and thus exercise control.
The European Commission has been insisting on such a schedule for more than a year, and the Roadmap is among the key reforms for Bulgaria to receive the second tranche of the RSP of 653 million euros. This time the schedule did not reach the plenary hall, after 5 months earlier the deputies rejected it for consideration at all. Bulgaria is the only one in the EU that has only one payment under the PVP - out of a total of four, and the only one that has not presented the REPower EU chapter of the Plan, which provides for 480 million euros.
Loans - for salaries and social security
But someone has to pay for the fake employment and salaries of the miners and, of course, these are the taxpayers. And the politicians' great fear of protests and social tension is pressuring them to lend millions. “Mines Maritsa Iztok” receive loans to pay salaries and social security.
In June, the company received a credit line of 100 million leva and another 50 million loan from DSK Bank, guaranteed by the Bulgarian Energy Holding (BEH). Now the state-owned mines are asking for another 100 million leva to pay salaries and budget obligations - and it is almost certain that they will receive them. Dimitar Glavchev's cabinet will obediently provide them, otherwise the technical bankruptcy will become real and in addition to the "honesty of the elections", he will also have to deal with the anger of the miners.
The problem for Bulgaria is huge. The Green Transition and the opportunity to modernize the economy and energy through new green technologies and investments in renewable energy sources are blocked. Relying on the coal industry means paying higher costs for carbon emissions, as the price of emission quotas in the EU is increasing. (According to the Annual Report on the activities of the TPP “Maritsa East 2” for 2023, emissions costs are 49.86% of operating costs, which are nearly 1.365 billion leva.) The result is expensive energy and an uncompetitive industry. The delay also stops the financing of projects in the three coal regions - Stara Zagora, Pernik and Kyustendil, from the Just Transition Fund, worth a total of 1.2 billion euros. A third of this amount was planned for this year.
Populism and disinformation spread by certain parties, in addition to sabotaging Bulgaria's commitments to decarbonization, can cause an explosion of civil discontent. This will happen when miners and energy workers realize that the promises of jobs by 2038 cannot be fulfilled. And the lack of preparation for the transition will only increase unemployment and deepen social inequality.
The collapse is inevitable
For 2024, the loss of “Mini Maritsa Iztok” will exceed 200 million leva, after approaching one hundred million in the first 5 months alone, coal production has fallen by 60%, and the company's liabilities are growing - according to data announced in parliament by the acting Minister of Energy Vladimir Malinov. For 2023, the reported loss is 137.4 million leva.
And the TPP “Maritsa East 2” registered an insignificant profit of 64.2 million leva before taxes. In the annual report for 2023, the company reported a decline in operating income by 64.29% compared to 2022, to 1.431 billion leva. “Since the beginning of 2023, a clear trend of a decrease in the exchange prices of traded electricity in the country and the region has begun to be observed, combined with high prices for greenhouse gas emission quotas, which greatly limits the possibilities of “The TPP Maritsa East 2” EAD to realize its production at prices that cover full costs and ensure a normal rate of return”, the document states.
So the question of how the salaries of miners and energy workers will be paid hangs, and quite threateningly. Along with the questions of how long they will be paid, how people will be compensated upon leaving, where the state will get the necessary funds - and how to carry out the reforms necessary for payments under the PVU, and in fact for climate goals and transformation of the economy. Are parliamentarians capable of finding the answers - or will we watch the flat comedy “Rescuers of the Maritsi”.