The restructuring of the armed forces resulted in the closure of many military facilities. The buildings in the former barracks were doomed to looting and destruction. At the same time, the closure of the military bases had a negative effect on the unemployment. Considering these consequences from the military reform, the Municipality of Razgrad sought ways of re-using the former military base for civilian purposes that would encourage business development and job creation. The NATO - sponsored military base conversion project, which was later financed under EU PHARE, provided such an opportunity. Razgrad is one of the two Bulgarian municipalities that were included in the project, which will result in EUR 2 million in investments in infrastructure, building reconstruction and new development in the former military base by the end of 2006.

In 2002 the Municipality of Razgrad initiated a study of the opportunities for the conversion of the former military base. The study identified interest on behalf of local and external companies in the development of a business zone for their production or commercial activities. Following the elaboration of a detailed development plan, the Council of Ministers transferred the title on the 210,000 square meters of the former military base to the Municipality. A conceptual design and a business for the transformation of the property into a business zone were developed. The EUR 2 million project was submitted to EU PHARE and funding was approved. The signing of a memorandum with the Ministry of Regional Development and Public Works and PHARE representatives in the middle of 2005 gave the start to project implementation. The next months were used to establish the project management bodies and to select a construction company. Construction works are scheduled to start in September and include both underground and ground infrastructure: water, sewer, gas-supply, alleys, approach roads, etc. Some of the existing buildings will be reconstructed . New buildings will also be constructed to meet companies needs: an exhibition hall for agricultural products, mushroom growing facilities, pastry shops, repair shops for agricultural equipment, etc. Banks and business support institutions will also locate in the business zone. Entertainment facilities have been planned, too. Projections show that more than 900 new jobs will be created in the zone. The business will invest an additional EUR 2 million in machinery and equipment.

- Creation of a modern, well-developed and functioning business zone;

- Support to local businesses and recruitment of external investors;

- External investments in the amount of EUR 4 million;

- Creation of 900 new jobs and reduction of unemployment in the municipality;

- Improved business climate;

- Creation of new production facilities and expansion of existing ones;

- Improved social status of the residents;

- The effects with regard to revenues from social and health insurance, taxes and reduced social assistance costs are calculated at EUR 1, 055, 000.

- Building the capacity of local specialists.