BDZ plans to break even by 2012

“The Bulgarian State Railways (BDZ) has tangibly improved its financial performance as a result of implemented reforms and the goal of its management is to break even in 2012 rather than in 2014 as formerly projected,” BoD Chairman Vladimir Vladimirov announced at a roundtable on reforms, restructuring plan and financial stabilization of the company. For the first months of 2011, BDZ’s lossed stood at almost BGN 16 mln, or BGN 19 mln down from the the same period of 2010. At its yesterday’s meeting, the Cabinet allowed bridge financing of BGN 140 mln. Some BGN 40 mln of this amount has been earmarked for repairs and the company will also begin paying its most urgent liabilities. The loan agreement with the World Bank is expected to be finalised in September.

BDZ will be able to apply for the purchase of new rolling stock in the next programming period. However, if the company breaks even, it may get a permission from the EC to be financed by residual funds under Operational Programme Transport in 2013, Vladimirov believes.

Some 30-40% of the measures for reforms have already been implemented. The assets have been transferred to the two newly-established independent companies - Passenger Services and Freight Services. The activities connected with security, cleaning and parcel services are planned to be assigned to external companies. Lay-offs will be avoided in this way because the employees will be redirected to other jobs. BDZ has 11,000 waggons now and 6,600 of these have become redundant due to the shrinkage in business. They must be sold in order to pay for the repairs of the remaining rolling stock, but it is difficult to find a market as they are in bad shape. No buyer has turned up yet for the first 550 waggons which have been put up for sale.

“One of the ways to increase the proceeds in by improving the quality of services,” said BDZ’s newly-appointed CEO Yordan Nedev. “I feel as if I am at war. We are fighting against something and we don’t know what it is. One of the first operational tasks is to purge the information flows in the company because 13,000 people work for BDZ, but they do not communicate,” stated Nedev.

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