SOFIA, Bulgaria (AFP)--A Bulgarian-Portuguese joint venture contracted to build and operate a major Bulgarian cross-country highway might withdraw for lack of funding, the regional development minister said on Thursday. 

The road is intended to be part of a link from the Adriatic to the Black Sea. 

"March 14 was the deadline for the Bulgarian-Portuguese joint venture to provide funding for the construction of the Trakia highway. We have not received any official statement from the companies until now," Regional Development Minister Asen Gagauzov told bTV private television Thursday. 

"My information is that no banking institution has agreed to supply the necessary credit," he added. 

"And for the time being this means there will be no concession." 

Bulgaria's government signed a contract in March 2005 with the joint venture - made up of Bulgarian state-owned companies Highways AD and Technoexportstroy, and the Portuguese firms MSF, Lena, and Somague. 

The contract was for the restoration and completion of the 443-kilometer southern Trakia highway, Bulgaria's second-biggest cross-country highway. 

It also granted the consortium a 35-year-old concession on the road, which will run from Bulgaria's western border with Serbia to the Black Sea resort of Burgas in the east via the capital Sofia, as part of the so-called Pan-European Transport Corridor 8, linking the Adriatic and the Black Sea. 

But Bulgaria revised the deal in April 2007, dropping all state bank guarantees from the contract. 

It also made the concessionaire agree to cover all eventual construction risks itself and not demand any increase of the initial price of around EUR590 million. 

Gagauzov said on Thursday that after he had received the venture's official statement of withdrawal, he would encourage the government to finance construction of the highway from the state budget. 

"Within the next month a half, we can call a tender for building the highway and construction can be completed within two years," he said. 

Sources close to the concessionaire recently told the Bulgarian daily Dnevnik that the global credit crunch and the sharp rise in fuel and construction material prices had made the project unprofitable.