INTERVIEW - Macedonia Needs Foreign Investment To Revive Telecoms, Energy, Tourism Sectors

EU aspiring Macedonia hopes to lure foreign investors to its telecommuncations, energy and tourism sectors to make full use of its investment potential, a government official said.

"The government plans to fully liberalise the telecommunications market. That is why we have called an international tender for a third mobile operator and by the end of the year we plan to call another tender for a fourth mobile operator," government spokesman Ivica Bocevski told SeeNews in an interview.

Attracting foreign investors is a top priority of the reformist centre-right reformist government in Skopje which believes Macedonia's telecoms and tourism sectors offer considerable investment opportunities, even though the industries now operate below capacity due to infrastructural and legal impediments.

Another step towards the full liberalisation of the Macedonian telecoms market was the tender for WiMAX licences, expected to become operational at the beginning of 2008, he said.

WiMAX is a standards-based wireless technology that provides high-throughput broadband connections over long distances, for transmission in the 3.4-3.6 gigahertz (GHz) frequency band that can handle Internet, video, voice or data transmission at a speed ranging from 128 kilobits per second to 34 megabits per second. The main advantage of that kind of wireless networks is the opportunity to offer high-quality data transmission to places where the installation of fibre-optic cables is economically inefficient or unfeasible.

Macedonia now has three mobile operators. The first one, Mobimak, was set up in September 1996 and was renamed to T-Mobile Macedonia in 2006. Cosmofon is part of Greece's Cosmote group. Earlier this year Macedonia granted a licence to Telekom Austria's wireless unit Mobilkom.

POWER SHORTAGES

Macedonia imports nearly 40% of the electricity it consumes.The country has been experiencing prolonged power shortages after its main supplier, neighbouring Bulgaria, nearly halted exports from January 1 when it closed a pair of 440-megawatts (MW) reactors at its sole nuclear power plant under pressure from the EU.

In order to resolve its energy problems, Macedonia has called numerous tenders for various types of energy capacities all over the country. Now it awaits binding bids to be placed by the end of the month in a tender for the sale of the hydropower plants Cebren and Galiste, with a combined installed capacity of some 530 MW.

Russian oil company Sintez Group launched earlier this year the construction of a 138.5 million euro ($189.0 million) gas-fueled co-generation power plant with a capacity of 230 MW in Skopje.

A tender for another co-generation facility, with 200 MW of electricity and 100 MW of heating energy capacity, will be called this summer, the board chairman of Macedonian majority state-owned electricity generation company ELEM, Vlatko Cingoski, told SeeNews earlier. The co-generation plant will be built at the site of the former communist-era steel mill Skopska Zelezara, whose units are owned by several companies, including Swiss Duferco-owned Makstil and Indian Ispat's Ladna Valavnica and Polukonti, he added.

In January Macedonia announced plans to call tenders for design, build-and-operate (DBOT) concessions for up to 400 small hydropower plants in every six months. So far, licences have been granted on 41 out of 60 concessions located on the rivers Vardar, Strumica and Crn Drim.

"We are preparing a tender for hydropower plant Boskov Most on the Crn Drim river with an estimated hydro potential of 5,500 GWh," Bocevski added but gave no timeframe.

Another opportunity for the southeast European country are the renewable energy sources. The first tenders for wind-powered generating facilities are expected to be called in the autumn. Macedonia will buy the wind-generated electricity at 8.9 eurocents versus prices of 4.5 to 12 eurocents for hydropower plants, he added.

TOURISM

The government in Skopje believes Macedonia's tourism industry offers considerable investment opportunities, even though the sector now operates below capacity due to lack of investments and marketing promotion.

"We aim to provide quality and attractiveness in the tourism sector. And not only to promote the lakeside resort of Ohrid, but also the ski resorts in the country, the capital Skopje," Bocevski said.

In June the British Business Group (BBG) unveiled plans to build 10 golf courses in Macedonia, seeking to help develop the country's tourism sector to its full potential. The BBG is a lobby group that operates in Macedonia and promotes the strengthening of business ties between Macedonia and the UK.

The estimated cost of a golf course in Macedonia will be around 3.5 million euro ($4.8 million), according to BBG.

"We are interested in the British Business Group's idea for the construction of golf courses and we are trying to find suitable sites. They will be offered at an international tender later this year," Bocevski said.

The number of tourists staying in Macedonia in June fell by 2.0% on the year to 44,528. Overnights reached 111,124, up by 1.2% from the same period of 2006. Most foreign tourists who visited the landlocked state of two million people came from Serbia, Montenegro, Bulgaria, Greece and Croatia.

Foreign direct investments (FDI) in Macedonia almost tripled to $41.25 million (30.2 million euro) in April from $15.93 million in March, and were eight times higher than the $5.65 million in April 2006, central bank data indicated.

The former Yugoslav republic was granted candidate country status by the European Council in December 2005 but has received no date for the start of its EU accession negotiations yet.

($ = 0.7327 euro)

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