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Bulgaria drafts plan for revitalization of state railway carrier

Xinhua, April 8, 2015 Adjust font size:

Bulgaria has drafted a plan for rehabilitation and development of its state railway carrier "Holding Bulgarian State Railways EAD" (BDZ) for the period 2015-2022, officials said here on Tuesday.

Vladimir Vladimirov, Executive Director of BDZ, highlighted at a press conference five key things in the plan, which has to be approved by the Bulgarian Parliament and notified by the European Commission.

Firstly, in the next seven years BDZ would have to invest 430 million BGN (some 238 million U.S. dollars) in the purchase of rolling stock where it is needed, in order to significantly increase the quality of service, Vladimirov said.

Secondly, the company would have to implement information systems, "which are crucial to its future development," Vladimirov said.

For comparison, he said that the cargo division of Hungarian railways has 14 information platforms, while BDZ Cargo has only four of these 14 platforms.

"Third direction is the repayment of the liabilities of the company, and this is extremely important because the investment program and all optimization measures make sense if at the same time we manage to repay the debts," Vladimirov said.

In the pessimistic scenario, the government would have to help BDZ with about 166 million dollars for the seven years, but according to more optimistic scenarios, one of which includes the sale of BDZ Cargo, the amount may drop to 76 million dollars, Vladimirov said.

In addition, BDZ will try to sell non-operating assets such as buildings, locomotives and wagons, to support the investment program and the repayment of its debts.

Meanwhile, the company would optimize all processes and activities, Vladimirov said.

BDZ was created in 2001, when the Bulgarian National State Railways were split into a railway infrastructure company National Railway Infrastructure Company (NRIC) and a transport service provider BDZ EAD.

To date, BDZ is the sole owner of two subsidiaries, BDZ Cargo EOOD and BDZ Passenger EOOD.

According to official data, financial situation of BDZ deteriorated significantly during the period 2002-2013, and at the end of 2013 the holding owed almost 350 million dollars while in 2002 the debt was some 108 million dollars. Endit