english | русский | български

Buy Safely in Bulgaria

A second home in Bulgaria?

• Home
• About Bulgaria
  • Official Profile
  • Most Beautiful Places
  • Do You Know That?
• Bulgarian Properties
  • Misconceptions
  • Legal Advice
  • Worst Buys
    • Black Sea Coast
    • Rila & Pirin
  • Bad Buys
    • Rila & Pirin
  • Best Buys
    • Black Sea Coast
• Gallery
• In The Media
• Buyers' Opinions

Latest News

23 000 houses in the sea are deserted

Around 23 000 new-built apartments South of Sunny beach are looking for buyers. This showed data of the ...

more

Latest Opinion

Българските ски курорти

Posted by Yanko on 2008-04-01

more

RILA – SUPER PANICHISHTE

I. General Information and Current State

Rila Mountain is home to one of the largest national parks in Europe. The legislator has set it apart as a safeguarded place because of the undisturbed wilderness, wild animals, and rare plants it shelters. Within its boundaries, special regimes of protection apply, which limit human interference (large-scale construction included) to the minimum possible.

Panichishte is located in the Northwestern part of Rila Mountains at 1350 m above sea level, in immediate proximity to National Park Rila’s boundaries. It is also very close to the town of Sapareva Banya, located somewhat lower and known for its hot-water mineral springs. Currently, Panichishte is still one of the cheapest ski resorts in Bulgaria. Compared to the major developments in Bansko, Borovets, and Pamporovo, it is a rather small-scale resort with less than 20 hotels and chalets that can accommodate about 1000 guests. It disposes of 2 relatively short alpine ski tracks and 1 nordic ski track. Another 3 alpine ski tracks can be found in the surrounding areas of Pionerska, Seven Lakes, and Rila Lakes chalets.

II. Planned / Possible Future Developments

The name of the future resort is “Panichishte – Rila Lakes – Kabul Peak”, also known as “Super Panichishte”. It is No.1 on our list because of some serious legislative breaches, possible document forgery, and other facts which make the case quite alarming.

Wealthy investors (about EUR 500 million will be invested within the next 6-7 years) and Sapareva Banya municipality are working hand in hand in an ambitious endeavor to turn the somewhat shabby socialist-era resort into Bulgaria’s forth largest skiing center (the first three being Borovets, Bansko, and Pamporovo). The development will involve the construction of 27 new ski slopes (80 km total length) and facilities in the vicinity of the Seven Rila Lakes (a world-renowned natural phenomenon) on a total area of 240 hectares, two-thirds (160 hectares) of which are inside the National Park boundaries.

The first step was the approval of a detailed spatial plan for the “village” of Panichishte. This allows for the approval of the general spatial plan for the whole resort "Panichishte – Rila Lakes – Kabul Peak.” Large-scale hotel construction is pending and the preparatory stage includes widening of the roads leading from Sapareva Banya to Panichishte and upwards to Pionerska Chalet. The foundations of a hotel above Pionerska Chalet are currently being dug out. The cable lift from Pionerska to the Lakes is also under construction. The construction of another major hotel complex will soon begin in Panichishte, financed by the large real estate company FairPlay Properties, which will acquire 50,000 sq.m of municipal land by the end of 2007. Off plan apartments in its future luxury settlement Rila Lake Resort, that will include a hotel with 103 rooms and 308 vacation apartments, are already on sale for 1300 EUR/sq.m.

III. Investor/Developer

The investor and developer is the joint-stock company “Rila Sport”. Ninety-nine percent of it is owned by Realstone Trade Business Corporation registered on the Virgin Islands, UK. The project is supported by the mayor and administration of Sapareva Banya municipality. The municipality sold 200 decares municipal land for the project to “Rila Sport” under suspicious terms, without a public auction. Rila Sport is managed by people who are connected to Georgi Velchev, brother of ex-finance minister Milen Velchev and notorious investor in lavish super hotels along the Black Sea coast. Sapareva Banya municipality is entangled with Rila Sport as a co-shareholder in the company which will complete the chair lift that will bring tourists at 2150 m above sea level and close to the Seven Rila Lakes – the first step in the unfolding of the future ski resort.

Other, less conspicuous investors are two Russian businessmen who own three of the existing hotels in Panichishte together with the adjoining land, two hotels in Sapareva Banya, and about 100 decares of land in the town. The Russians, however, also rely on Rila Sport’s “Super Panichishte” project: “We are happy with our investments. But it will all depend on Rila Sport’s project because without modern ski facilities no tourists will come here.”

IV. Investment Potential

The economic potential of “Super Panichishte” will depend heavily on the ability of Sapareva Banya municipality to construct quickly enough all the necessary infrastructure, in the form of roads, electricity, and water supply networks, and support it afterwards. Having in mind the poor infrastructure track record of Bulgarian resorts when it comes to large-scale new development, we can conclude that it is a pretty uphill task for relatively small, inexperienced at local governance communities to catch up with the pace of construction, especially under intense investor pressure. This problem was witnessed in Bansko and along the Black Sea coast. Sapareva Banya municipality has already completed several infrastructural projects aimed at increasing the investment attractiveness of the area. Among them is the rehabilitation of the 7.5-kilometer segment from Sapareva Banya to Panichishte, including widening of the road at some places. The mayor of Sapareva Banya has expressed on numerous occasions determination not to let the Bansko infrastructural disaster happen in Panichishte. According to his words, first the infrastructure will be created, only then any construction will be allowed to begin. How will this in practice happen, however, remains to be seen – as construction works have already begun.

Over-development of some of the Bulgarian resorts is often cited as one of the reasons why overseas investors start to withdraw from the market at a certain point. This is one of the factors that scared many investors away from Sunny Beach and Bansko in the last months. Will the municipality be able to avert chaos and keep development under control by providing for the promised 30% construction density? Indeed, will it have the will to do it since it is a stakeholder (and a shareholder, for that matter) in the Rila Sport “Super Panichishte” project?

Compliance with all procedures, as stipulated by law, is also a factor determining the level of economic potential. As early as a month ago, off plan (not yet built) holiday homes in Panichishte were already on sale on the property market for 1300 Euro/sq.m. Despite the fact that the construction of the resort is still under question, real estate agencies already behave as if the resort is finished. What would happen if the state after all bans further construction? Or otherwise – suppose the resort is built even without the necessary permits – there is a chance that afterwards a state authority with different leadership will decide to enforce law and order all illegally built developments demolished. Examples are already available along the Black Sea coast (http://www.investor.bg/?id=57454).

Another factor to consider is where the money comes from. As was mentioned above, the investor at “Super Panichishte” is an offshore company with undisclosed origin of its finances. No investment in property which is financed through suspicious sources can be deemed “wise” or “safe”.

Accessibility – Sapareva Banya is less than 100 km away from Bulgaria’s capital Sofia, which is believed to be one of the municipality’s strongest advantages. Accessibility from the capital however is not entirely problem-free, as one of the roads passing through Samokov is rather busy and curvy, whereas the other passing through a couple of smaller villages is strewn with holes. There is another way to reach Sapareva Banya via Dupnitsa but it is much longer. Then, there is the problem with accessibility from Sapareva Banya to Panichishte resort. The existing road which the municipality reconstructed and widened with money from the state budget is still potentially dangerous during severe winters, especially with the inevitable increase of traffic the new resort is bound to bring. If the plans to construct a highway from Sofia to Samokov (to facilitate access to Super Borovets) come to fruition, this would certainly make Panichishte more accessible too, but this is not to be expected in the next couple of years.

Overall Assessment: moderately pessimistic

V. Legislative Review

Bulgaria’s Constitution and the Protected Areas Law stipulate that the territory of Rila National Park is exclusive state property and is managed in the interest of all citizens of Bulgaria. An array of building permits and assessments are required by the Environmental Preservation Law, the State Property Law, the Law on Territorial Development, the Protected Areas Law, the Biological Diversity Law. Moreover, the EU directives on birds and habitats also impose restrictions on construction activities. Such construction is also prohibited by the Rila National Park Management Plan which was adopted by the Council of Ministers. Until now, the Ministry of Environment and Waters has issued no positive assessments regarding the construction of “Super Panichishte”.

The general spatial plan for the future resort was submitted for review at the Regional Inspectorate for Environment and Waters-Sofia early in 2005. The institution’s standpoint was that the plan didn’t comply with Bulgarian environmental protection legislation and had to be reworked. The recommendation to the developers was to work out an alternative plan that will comply with the Protected Areas Law and the national park’s management plan. Meanwhile, it is a mystery how as early as 2004, Sapareva Banya municipality acquired ownership of large areas of previously state-owned forests in the Panichishte region, managed by State Forestry Dupnitsa. After numerous appeals before the Kyustendil District Court, the Supreme Court of Cassation finally awarded the contentious forests to the municipality even though no municipal forests had ever existed there before.

Sapareva Banya municipality, together with Rila Sport, is a co-owner of Atomik Invest, the company that currently completes the chair lift up to the Seven Rila Lakes region. Not only does the lift enter the territory of Rila National Park, not only has the building permit issued in 1998 long expired, but Sapareva Banya municipality, who was given the construction rights on the condition not to cede them to third parties, is now ceding them to Rila Sport.

Just two years ago, Sasho Ivanov, Sapareva Banya’s mayor, was trumpeting far and wide how Rila Sport is the best thing that happened to his municipality and thanks to the upcoming project the local people were alive with hope for the future again. After the negative assessment of the Regional Inspectorate he changed his tune and now claims that no such project exists. Meanwhile, as of October and November 2007, logging of trees in the region above Pionerska Chalet (where the lower station of the chair lift will be located) began. It is claimed these are fire-prevention cuttings, but it is striking how precisely they coincide with the location of three of the future ski tracks in Rila Sport’s project.

Another violation that might have been committed in the years after the plans for “Super Panichishte” surfaced is a possible documentation forgery. In 1997, State Forestry Dupnitsa provided a map according to which the boundaries of Rila National Park were determined. Now, in newer maps that have been submitted, the area of the national park has become smaller, while the area of municipal land has grown with 20 decares. Half of this area has been taken away from the park along the road Panichishte - Pionerska Chalet, which the investor Rila Sport has been reconstructing since the summer. For this reason, the control authorities during their check-ups found that the road encroaches upon the national park only insignificantly.

Overall assessment: a lot of question marks

VI. Environmental Aspects

The potential turnover of about 6,000 skiers per day will pose serious challenges to the biodiversity of Rila National Park. The habitats of some endangered species will be fragmented and destroyed. The Bulgarian environment ministry is very often unable to impose strict control to ensure that its prescriptions and these of the environmental protection laws are followed. Rila National Park is home to large populations of owl and woodpecker species some of which are relict for the country.

There also potential risks for the health and life of skiers, as indicates the position of the Bulgarian Extreme and Freestyle Skiing Association, who have extensive expert experience in the area where the proposed ski tracks are to be located. Their position states that the project plans to locate ski tracks in the immediate vicinity of the starting places for formidable and dangerous avalanches. The gondola lift that will bring skiers up to Kabul Peak will “ensure” their easy access to extremely steep and even vertical slopes, cut through by several very large avalanche gullies. The slope’s vertical drop of more than 300 m presupposes accidents, many of which with fatal outcome. Moreover, the access of skiers to Kabul Peak will make it possible for them to enter the territories of Skakavitsa Natural Reserve and disturb its regime of protection. Other slopes in the region are also potential starting points for avalanches that can be unleashed by poorly-prepared skiers.

Overall assessment: very low

VII. Newspaper articles about Super Panichishte
The Big Bite “Panichishte” – 168 Hours

In addition to “Super Panichishte,” there are also plans to build “Super Borovets” by "Rila Samokov 2004," a joint-stock company also owned by foreign investors. Another project includes "Iskrovete," allegedly linked to the businessman Hristo Kovachki.

Copyright © 2008 SafeBulgarianProperties.com