Ministry of Transport, Information Technology and Communications

The expenditures in the most important companies from the railway sector were increased by 1 billion levs forthe period 2009 - 2012, said Mr. Danail Papazov, Minister of Transport, Information Technologies and Communications, at a press conference today. He compared the management in the last three years of the two companies: the Bulgarian State Railways (BDZ) and the National Company "Railway Infrastructure" (NKJI) as plugging holes in the absence of planning.

The net losses of the Bulgarian State Railways Holding from 2005 to 2008 were less than 2.5 million levs, while for the period from 2009 to 2012 they have already reached nearly 193 million levs, said Minister Papazov.

According to his words this negative difference has been achieved against the background of major cutbacks of 4,701 employees of the Holding Companies in the period 2009 - 2012.

At the same time, the analysis shows serious increase of the subsidy provided over the years. From 2005 to 2008 the Holding received a total subsidy of 420 million levs, and from 2009 to 2012 - by considerably more funds - 676,600,000 levs.

The general conclusion, according to Minister Danail Papazov is that BDZ Holding and its companies have not been properly managed and have accumulated huge debts to NRIC and to the creditors. Almost none of the recommendations for the rescue plan of BDZ has been complied with, except perhaps the cuts of personnel.

In relation to the bad financial standing of Holding BDZ, the revenues of NRIC from infrastructure charges have continuously descreased. In 2005 the company’s revenue amounted to 147.6 million levs, while in 2012 it decreased to 87,413 thousand levs. At the same time there was drastic increase of the funds provided by the state budget for the development and exploitation of the railway infrastructure: from 41 million levs in 2005 to 217 million levs in 2012. At the same time, from 2010 to 2012 there was a 20% reduction of the NRIC’s personnel.

Minister Papazov emphasized that among the recovery measures for the two railway companies are termination of the privatization of "Freight Transportation" and its restructuring, clearing the debts of BDZ Holding EAD to the State Enterprise ‘NRIC’ under the scheme debt to property in three stages by 2014, sales of buildings and property.

Minister Danail Papazov presented a program for the recovery of the two companies which includes:

Clearing the debts of BDZ Holding EAD to SE NRIC under the scheme debt to property in three stages:

Up to 07.15.2013, the - 12 000 000 Levs

Up to 31.12.2013 - 25 000 000 Levs

Up to 31.12.2014 - 60 000 000 Levs

Sale of the buildings and properties of the SE National Company "Railway Infrastructure" transferred from BDZ Holding under the scheme debt to property in three stages:

Up to 31.12.2013 - 10 00 00 levs

Up to 30.06.2014, the - 25 00 00 levs

Up to 30.06.2015 - 60 00 00 levs

- Transfer of the railway bridges at Varna Ferryboat Complex from SE "NRIC" to SE "Port Infrastructure" until 31 December, 2013.

- Sale of non-operating assets and scrap metals.

- Restructuring of the Bulgarian State Railways “Freight Transport” in:

• Short term - the end of 2013

• Medium term - the end of 2014

• Long term - end of 2017

- Dislocation of the management and the administration of BDZ Holding, BDZ "Freight Transportation" and Bulgarian State Railways "Public Transportation" from the building at Ivan Vazov Str. in Sofia to Sofia Central Railway Station and Poduene Railway Station until December 2014.

- Structural optimization and strict control over the performance of SE National Company "Railway Infrastructure".