Bulgarian Railways May Receive BGN 140 M State Loan

If the parliament adopts the proposal at second reading, Bulgarian State Railways will receive BGN 140 M as a state loan. Photo by BGNES

The Bulgarian State Railways (BDZ) may receive a loan of BGN 140 M from the state, which will be used for paying off old debts to creditors and suppliers.

This was decided on Thursday when the Bulgarian Parliament adopted at first reading the draft for providing help to BDZ.

The sum will be provided from the central budget and it will be a loan from the Bulgarian Development Bank. The money will be refunded in the state treasury after the company receives a loan from the World Bank.

BDZ's old debts are more than BGN 500 M, but together with current obligations amount to almost BGN 1 B.

Bulgaria's Transport Minister Alexandar Tsvetkov has explained that the loan was crucial for the company.

"What needs to happen now is capitalization of the Bulgarian State Railways," he said, adding that the plan for restructuring of the company includes 100 measures for optimization of every single activity of the company.

Tsvetkov has also explained that the plan has been checked by experts from the World Bank and the European Commission and other independent experts.

"After checking the activities that we are planning to take, the European Commission stated it firmly supported the reforms that are happening in BDZ. This is why there will be an European development of the Bulgarian railways. BDZ will become a beneficiary under the "Transport" program and we will have a grant from the EU to buy new carriages, wagons and trains," he said.

At the end of 2010, it was made clear that Bulgaria might receive up to BGN 460 M as a loan from the World Bank for the Bulgarian State Railways, which are to be received in the summer the earliest.

Under the conditions for the loan, the Bulgarian authorities were supposed to send within six months a plan for restructuring of the company, which should be officially notified. 

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