Background
In the period 1990 - 1998 many of the state-owned enterprises on the territory of the Municipality of Gabrovo, which provided employment to a large part of the population, are in the process of privatization, restructuring or liquidation. The municipality seeks opportunities for solving the existing problems by stimulating the private sector for active participation in the economic development of the municipality, setting forth the following goals:
- to create a positive model for public - private partnership, applicable in future situations;
- to increase the contribution of private investors to the development of local economy and industry;
- to provide infrastructure investments, employment opportunities and additional tax revenue for the municipality.

Practice
At the beginning of 1999, to achieve its objectives the Municipality of Gabrovo starts a project, which aims to improve the methodology for conducting public bids for sale of municipal lots. This project unites the efforts and aspirations of local government, citizens, businessmen and NGOs and is implemented with the expert assistance of the Municipality of Portage, Michigan, USA (in the framework of the Technical Twinning Program facilitated by FLGR and ICMA).

The new elements which contribute to the overall improvement of the bidding methodology are:
- development of optimal bidding documentation after profound assessment of the property, including survey of existing infrastructure, passenger flows, transport, distance from the town center, town-planning indicators, etc.;
- development of a set of criteria for the sale of individual municipal lots on the basis of the main objectives, i.e. price, investments in infrastructure, number of work places and type of activity;
- presentation of the draft contract together with the bidding documents;
- organization of a pre-bidding meeting with potential investors in order to provide wide publicity to the bidding and to obtain feedback;
- announcement of the meeting through the Gabrovo Chamber of Commerce, the Bulgarian Industrial Association Gabrovo branch and the local media.

The Union of Private Entrepreneurs and Craftsmen is very active in supporting the innovative practice through providing publicity and participation in the pre-bidding meeting. More than 40 participants take part in the meeting.

At the meeting, together with the traditional questions about the price and intended use of the municipal lots, investors raised questions about the possibilities for their expansion. The municipality undertakes commitments for appropriate action. The participants proposals put forward at the pre-bidding meeting are incorporated and used for completing the bidding specifications, i.e. an optimal set of the bidding documents is produced, which guarantees the active participation of more investors.

The bids are announced and the final specification forms are sent to the private investors. On conducting the bidding sessions, the bids are classified and approved, and the municipal properties are awarded to the private investors.

Results
As a result of the project implementation, several positive changes in the private investors activity are observed. The increased interest towards the properties offered for sale leads to a greater commitment on the part of investors: providing additional job opportunities and improving the infrastructure of the Municipality of Gabrovo. These conclusions are supported by the following facts:
- 59 people took part in the bidding sessions;
- basic price of all announced lots - 27 405, 91 BGL;
- lots sold at a final price of 81 657 BGL;
- 11 017 BGL obtained for infrastructure investments;
- minimum number of work places required - 24;
- jobs created through the bidding - 46;
- 6 new commercial and manufacturing enterprises will be established.