Railway Freight Services to be privatized

“A substantial progress in the privatisation of the Railway Freight Services is expected this autumn, “said yesterday the Chairman of the Board of Directors of the State Railways Holding (BDZ), Vladimir Vladimirov at a discussion on the plan for restructuring and financial stabilization of the holding.

“The Privatisation Agency will be in charge of the transaction. The privatization procedure is still not initiated, but the selection of consultants has been intiated . The task of the state carrier is to make freight transport services profitable, in order to provoke investment interest,” Vladimirov said. He stated that in 2010, the loss of the company decreased from BGN 64 mln to BGN 47 mln. In the first quarter of the year, the negative financial result was down by BGN 7 mln, on an annual base. Accumulated BDZ losses in recent years stood at BGN 218 mln, but the company should become profitable by 2014.

“The plan for reforms is the best thing that ever happened to the Railways in the last 20 years,” said Georgi Angelov, economist from Open Society. He pointed out that the company could go bankrupt if it does not receive the World Bank loan. “Investments of about €200 million in locomotives and cars can substantially improve the quality of passenger traffic,” predicted Vladimir Vladimirov. However, in order for our trains to reach European standards, some €500 mln would be needed. Investments in infrastructure have to be made first, however, because the purchase of fast-speed trains is meaningless given the current state of the lines.

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