Bulgaria Braces for Railway Strikes over Harsh World Bank Loan

The talks between the government representatives (right) and the syndicates (left) on the restructuring plan for the railways, which will determine the fate of thousands of workers, have technically failed.reforms, loans, layoffs, infrastructure, Transpor

Bulgaria will most likely see the start of massive railway strikes next week as the government and the syndicates have failed to reach agreement over plan to restructure ailing state company BDZ.

The trade unions, the Ministry of Transport, and the management of the two-state owned companies - BDZ Holding and National Company "Railway Infrastructure" were supposed to agree on a reform plan for the financial stabilization of the state railways sector by Tuesday.

However, the working group's talks have fallen through, and the syndicates are therefore expected to declare a national strike at the beginning of next week.

Up to 7000 railway workers might be laid off in the coming months from the two state entities as Bulgaria is bidding to receive a badly needed loan of BGN 600 M for the sector from the World Bank – BGN 460 M for BDZ, which handles the passenger and freight traffic, and BGN 140 M for the NKZI, which is in charge of the railway infrastructure.

The situation of BDZ is particularly grave as the company's total debts amount to BGN 1 B; last week the Cabinet decided to provide the company with a state loan of BGN 140 M to cover its current debt payments.

The World Bank is ready to provide the BGN 600 M loan (for which a memorandum was signed in December 2010 in Sofia) to Bulgaria on the condition that the spending for personnel for BDZ and NKZI are reduced by 30%. The companies employ a total of 27 000 people, and up to 7 000 are expected to lose their jobs if the World Bank offer is accepted.

NKZI has already laid off 1 026 people in the past year, and will have to lay off 2 944 more by 2014, while BDZ will have to make redundant 2 800.

The syndicates, however, are extremely worried, and say that NKZI actually plans to lay off 2000 more people in the period between 2014-2016. What is more, they claim the World Bank insists that some of Bulgaria's unprofitable railway lines be shut down.

While Bulgaria's Deputy Transport Minister Kamen Kichev claims that the government has provided the syndicates with a clear package for restructuring, Petar Bunev, head of the railway syndicate of KNSB, says that the government has refused to reveal its specific arrangements with the World Bank, and that it has not prepared a concrete investment plan for the railways.

"We got the documents of the Transport Ministry Monday night. They don't have anything specific, they just copied and pasted the social programs from the website of the Labor Ministry," Bunev said adding that the syndicate leaders of BDZ and NKZI will have a meeting early next week, and will most likely decide to go for a national strike.

Bulgaria's National Conciliation and Arbitration Institute has already ruled that in case of a strike, there will be no trains running between 8 am and 4 pm every day. Deputy Transport Minister Kichev has said the government asked the railway workers not to go on a strike.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!