Winning formula?

Source:  www.sofiaecho.com

Bulgaria’s dreams of hosting a Formula One grand prix in the near future have hit inevitable snags with finding the necessary financing to build the track, but the Government has shown no sign of abandoning the idea.

Talks with prospective investors from Qatar in spring yielded no tangible results, but the Economy Ministry said on August 30 that another Middle East investor had been found. The ministry said that it signed an economic co-operation agreement with Emirates Associated Business Group (EABG) and the first issue on the agenda, with the details to be ironed out in the near future, would be the “possibility of building a Formula One track near Sofia with all the accompanying infrastructure”.

The agreement was signed by Economy Minister Traicho Traikov and Mohammed Abdul Jalil al-Blouki, said to be the president of EABG. The agreement envisioned the creation of a joint company, with the Cabinet providing the land for the future track. Other joint projects in areas including infrastructure, agriculture, IT and real estate would be presented at a later date, the statement said.

According to the ministry, EABG was state-owned by the Abu Dhabi emirate, the largest and richest of the seven that make up the United Arab Emirates.

The group’s website, however, made no reference to being owned either by the Abu Dhabi royal family or the emirate itself and did not offer any information on the group’s management or board directors. Its listed address included only a PO Box in Abu Dhabi, one telephone number and one fax.

Despite the mystery surrounding the identity of the prospective investor, the meeting drew effusive praise from Roumen Petkov, the former socialist interior minister and chairperson of the Formula One race organising committee.

“Bulgaria has never been closer to having a Formula One race track,” Petkov said, as quoted by news agency Focus. “My only concern is the short deadline for building such a large project, but knowing Bulgaria’s construction capacity and the will of our partners, I am optimistic. Finding a respectable investor is a grand achievement.”

Bulgaria secured agreement for a preliminary contract allowing it to host a Formula One Grand Prix in September 2009, but to be included on the competition calender, the race track would have to be completed by the end of 2011, a very tight deadline considering how long it took other new Formula One entrants to develop their race tracks.

Abu Dhabi’s own Grand Prix, held for the first time in November 2009, was first announced in February 2007 and its race track was estimated to have cost 900 million euro.

The high cost is partially explained by the additional work that needed to be done on the Yas Island off the coast of Abu Dhabi that hosts the race track and Bulgarian officials estimated it would take less to build a race track if the Dobroslavtsi air field near Sofia, earmarked for the purpose, is used. The 320ha plot was estimated to be worth 180 million euro by the Cabinet.

Sofia chief architect Petar Dikov said that initial estimates put the cost of construction at no less than 200 million euro, but said that no Budget funding would be used. “We have invited prospective investors and Abu Dhabi has shown interest. They have the experience because they have a race track,” Dikov was quoted as saying by Dnevnik daily.

But while costs have been estimated, it was unclear whether a similar estimate has been drafted concerning expected revenues, given the loss-making track record of some European races in recent years.