Untimely Market Liberalization To Blame for Privatization Problems of Bulgaria’s Railways Freight Co

Business | April 8, 2015, Wednesday // 10:45|  views

Photo by BGNES

The liberalization of the cargo transport market in Bulgaria happened at an inopportune time and obstructed the privatization of the freight unit of the Bulgarian State Railways (BDZ) company, according to Transport Minister Ivaylo Moskovski.

In a Wednesday interview for the morning broadcast of the Bulgarian National Television, Moskovski stated that the company could not compete with the eight private carriers on the market.

He made clear that no entity had inquired about the company at the Privatization Agency, adding that its privatization was part of the 7-year strategy for Holding BDZ.

Moskovski, as cited by investor.bg, pointed out that a successful privatization would reduce the total debts of the state-owned railway company.

He said that the authorities had also drafted a scenario based on a failed privatization of BDZ Freight Services.

Moskovski presented the 7-year strategy for BDZ on Tuesday.

On Wednesday, Bulgaria’s Transport Minister is to present it to the parliamentary transport committee.

Moskovski explained Wednesday that the plans would be presented for public discussion.

He expressed hopes that the proposals would be approved by Parliament so that the sustainable development of BDZ could be guaranteed, regardless of the makeup of the government.

Moskovski informed that the 400-page document envisaged a minimum of BGN 210 M of investments in new rolling stock, while the optimal scenario provided for investments of BGN 400 M in new trains and railcars.

Bulgaria’s Transport Minister stated that the company expected to receive BGN 130-300 M to settle its debts.
He specified that the talks with the creditors of BDZ would take place on the basis of this 7-year strategy.

Moskovski made clear that the strategy also envisaged staff cuts by 600 people from each of the two units, BDZ Freight Services and BDZ Passenger Services, over a period of 7 years.

He said that a part of the employees were expected to retire and vowed that there would be no layoffs at BDZ in 2015.

Moskovski noted that the railway section Sofia-Burgas and the one going to the Bulgaria-Greece border would be upgraded in 4-5 years, adding that the funding would be provided under EU operational programs.

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Tags: Bulgarian State Railways, BDZ, BDZ Freight Services, BDZ Passenger Services, Holding BDZ, Ivaylo Moskovski, Transport Minister, Privatization Agency, privatization, debts


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