BDZ to sell a warehouse in Russe “The Bulgarian State Railways (BDZ) will put up for sale its warehouse in the town of Russe, representing a large industrial property of dozens of decares,” Yordan Nedev, Head of BDZ holding company, said for investor.bg today. “In 2012, we must complete the main stages of the reform, including the new structures of the holding's two subsidiaries - BDZ - Passenger Services JSC and BDZ - Freight Services JSC. We should finalise the first wave of lay-offs,” he added. According to him, BDZ - Freight Services JSC counts on an increase of its cargoes by some 5%-10%. Contracts with new shippers, who were previously clients of the holding company’s rivals, have already been signed. “We have recently attracted new clients who have never transported cargoes from and to Bulgaria. The new services and products we have been offering in the recent months already have a positive impact on our business and the revenues from freight services,” commented Nedev. “The revenues from transportation of passengers will also increase after improving this service. Some 30 sleeping cars ordered earlier are expected to be delivered in 2012. There is much talk about the interest in BDZ - Freight Services JSC, but the investors have not clearly stated their positions yet, said Nedev.
Source: Class (01.02.2012)

Railway shipments decrease by 50% due to the bad weather ”Railway shipments decreased by 50% because of the extremely bad weather conditions. Currently, we transport about 15,000 tonnes per day, compared to 30,000 tonnes in normal conditions”, Plamen Dzhurov, Manager of BDZ-Freight Services, told Klassa. He explained that the company was not paying defaults yet because it managed to provide the transport services, albeit with a delay due to the very difficult conditions. According to him, the most problematic is the Lom-Mezdra-Vidin line, where the cleaning of the railway route is very difficult. There are also problems with the locomotives, because some of them have been redirected to BDZ-Passenger Services. Dzhurov specified that the company was ready to increase the number of freight cars if shipments increased steeply. According to him, talks are being held with port operators in order to increase the volume of freight. The company expects a return to the normal amount of shipments when the weather improves. Road haulage also reported losses due to the severe weather conditions. “The direct additional costs for a heavy-duty truck amount to BGN 700 per trip as a result of the restricted traffic along the Danube”, said Krasimir Lalov, Deputy Chairman of the National Association of Bulgarian Carriers. The reason is that, at present, all the traffic passes through the Danube Bridge near Russe. Thus, the trip to Sofia is 500 km longer, which means an additional 180 litres of fuel. An alternative for the transportation of goods to Europe is via Serbia, but the permit needed will cost additional fees and will thus raise the price of the service.
Source: Class (16.02.2012)

The Bulgarian government will terminate attempts to concession Sofia's Central Railroad Station, says Transport Minister, Ivaylo Moskovski. The reason for the move is upcoming renovations and repairs with the use of EU funds. EUR 30 M from EU operational programs will be invested by the end of the current program period in the complete and long-overdue renovation of the railroad hub. The deadline is the end of 2014. The State-owned National Company Railroad Infrastructure informs that the design project is ready. The application form will be submitted by the end of the current year and construction will begin in 2013. After that, the space in front of the Station's building could be offered for concession. The concession idea first emerged in 2010, during Moskovski's predecessor, Alexander Tsvetkov, but never materialized due to issues with the ownership of adjacent properties.
Source: Monitor (29.02.2012)

Bulgarian State Railways pays BGN 1,7 mln per month to crediting banks “Every month, a total of BGN 1.7 mln is being paid off to crediting banks,” said Vladimir Vladimirov, Chairman of the Management Board of the Bulgarian State Railways (BDZ) on BNT. In the first months of 2012, the company recorded a negative financial result, but it is expected to be compensated in the summer period, and the holding to finish the year with profit. The savings after the start of the reforms in the company are deemed to make this possible. “The company’s damages from theft of fuel alone are about BGN 3 mln per year,” said Vladimir Vladimirov. He explained that the losses incurred in Freight Services are about BGN 2 mln per year and those in Passenger Services - about BGN 1 mln. This is the reason for the intensified inspections in the company which started late last week and are aimed at determining actual fuel consumption. The inspections have detected so far about 160 litres of illegally drained diesel by employees from the Locomotive Equipment Unit in Svilengrad and from the Locomotive Depot in Dupnitsa. Last year, the unprofitable lines were suspended, which substantially reduced losses. Staff optimisation is expected to continue this year, after the release of about 2,000 workers at the end of 2011. " In the first three months of 2012, the free financial resources of the holding were BGN 12 mln more, compared to the same period last year," said Vladimirov. He added that the reforms were progressing as planned, every foreseen step had been implemented, the deadlines will be kept and this development will continue. Around BGN 200 mln is the expected amount from the privatization of Freight Services. Potential investors should declare their interest in the company directly to the Agency for Privatization and Post Privatization Control. Italian, Spanish and Austrian companies have submitted inquires so far. Russian Railways declared its interest in the acquisition yesterday.
Source: Class (26.04.2012)

BDZ reduces its loss by BGN 6 mln since the beginning of the year BDZ (Bulgarian State Railways PLC) reduced its financial loss by BGN 6 mln for the first three months of 2012, compared to the same period last year, stated yesterday Vladimir Vladimirov, Chairman of the Board of Directors of the Holding Bulgarian State Railways SPLTD. For the period January -March of 2011, these amounted to BGN 21 mln and for the same period of 2012, the losses were BGN 15 mln. Last year, the total loss of the Holding decreased. According to statistics as of April 1, 2011, the financial loss was BGN 806 mln, while on the same date this year, it reached BGN 743 mln. Vladimirov explained that for the first three months this year BDZ reported the worst financial results. The free funds operated by the Holding amount to BGN 12 mln. "This allows us to start disbursing our liabilities to all creditors and bondholders," stated Vladimirov. Every month, BDZ transfers a disbursement instalment of BGN 1.8 mln to the German KFW bank for redemption of the loan borrowed for the purchase of the Desiro trains. "We are achieving a gradual repayment of our debts. We have reached additional agreements on the disbursement of our liabilities with all major suppliers and lenders," stated Yordan Nedev, BDZ CEO. According to him, an austere fiscal policy has been imposed and the structural reform is a priority. The option of redeeming the bond loan borrowed by the Holding via the sale of 3,500 freight waggons is currently under discussion." Negotiations have already been conducted with the creditors and they finally agreed with this proposal," stated the Chairman of the Board of Directors. According to him, the freight cars, which are not part of BDZ - Freight services LTD, are assets of the holding and their sale will not affect the privatisation procedure. The freight waggons were estimated at BGN 52.2 mln, while the loan to be repaid to the bond lender is nearly BGN 200 mln. The company management expects, as a result of the sale of BDZ - Freight services LTD, to be able to disburse a portion of its liability. The rate of collectibility of receivables from debtors has also increased. Currently, these are at their absolute minimum and reach some BGN 1.5 - 2 mln for the three companies, explained the Holding's management.
Source: Class (10.05.2012)

Moskovski stops the layoffs in the Freight Services Department of BDZ Yesterday, Ivaylo Moskovki, Minister of Transport, Information Technology and Communications, suspended the layoffs in the Freight Services Department of the State Railways (BDZ). This happened after a meeting with Plamen Dimitrov, President of the Confederation of Independent Trade Unions in Bulgaria, where trade unionists presented their arguments against the intentions of the company's management for new layoffs. Two days ago, it was announced that 400 workers have to be dismissed. According to Moskovski, these layoffs have already been agreed, but have not been carried out. “Additional cuts, beyond the number that has already been agreed, are not foreseen.” Regarding a possible dismissal of employees from the Passenger Services Department, the Minister of Transport explained that there would be no layoffs, but it was a matter of further structural optimizations. According to him, there are no reasons for protest actions.
Source: Class (11.05.2012)

Bulgarian State Railways co BDZ has received its first 12 sleeping cars as part of an order of a total of 30 sleeping cars from Turkey's state owned manufacturer Tuvasas. The last time the Bulgarian State Railways bought new sleeping cars was in 1982, and the last time the company bought regular cars was in 1988. The 12 sleeping cars are the first new ones to be purchased by BDZ in the past 30 years, Bulgarian Transport Minister Ivaylo Moskovski stated at a ceremony in Turkey's Adapazari where the purchase was presented to the public, as cited by the Bulgarian government press service. Turkey's Transport Minister Binali Yildirim also attended the ceremony. Moskovski declared that the new sleeping cars are the start of the gradual renewal of Bulgaria's railway transport. He said Tuvesas was expected to deliver the rest of the sleeping cars by the end of 2012. He also noted that in July 2012 Bulgaria will launch the modernized section of the Plovdiv-Svilengrad railway leading to the Turkish border, allowing trains to run by 160 km/h. Bulgaria commissioned Tuvesas to build the 30 sleeping cars back in December 2010 in a BGN 63 M deal. In the fall of 2010, Tuvasas defeated in court the Bulgarian state railways over the same order as BDZ tried to cancel the deal after initially contracting the Turkish company.
Source: Dnevnik (21.06.2012)

Bulgarian Prime Minister Boyko Borisov has declared his idea to trade BDZ Freight Services, the cargo unit of the Bulgarian State Railways BDZ, to Siemens in exchange for BDZ's debt to the German company for a recent train purchase. Borisov announced his idea Thursday after a meeting with Hans Heinrich Driftmann, the President of the Association of German Chambers of Industry and Commerce. This is not a brand-new idea since it was discussed back in January 2012 when the Bulgarian transport authorities mentioned it as an option for covering the debt of BDZ Holding to German bank KfW for the purchase of 50 electric and diesel Desiro trains since 2003. Back then KfW threatened to seize all Desiro trains – which are the only new trains bought by the Bulgarian State Railways after 1989 – over a delayed payment of EUR 24 M by BDZ. Back in 2005, KfW granted BDZ a loan of EUR 190 M for the purchase of the 50 Desiro trains. At present, BDZ still owes KfW BGN 235 M, or about EUR 115 M, according to Vladimir Vladimirov, head of the BDZ Holding Board, as cited by Mediapool Thursday. The assets of BDZ Freight Services are worth some BGN 320 M, as mentioned by Bulgarian Transport Minister Ivaylo Moskovski at the end of 2011. During its first privatization attempt, BDZ has hoped that its freight division can be sold for BGN 200 M but critics say BGN 100 M would be a more realistic price. The push to sell BDZ Freight Service has been highly questionable since it remains the only somewhat profitable division of BDZ. At the same time, Borisov's statement about swapping BDZ Freight Services for BDZ's KfW Siemens train debt comes just days after the first attempt of the Borisov Cabinet to privatize BDZ Freight Services failed since it attracted only a single bidder with mysterious ownership. "Bulgaria owes almost BGN 300 M to Germany under this deal, and this deal weighs heavily on us. This deal is uniquely stupid," the Bulgarian PM told reporters after his meeting with Hans Heinrich Driftmann, the President of the Association of German Chambers of Industry and Commerce. "BDZ Freight Services is up for privatization, and I have asked for talks with Siemens if they would agree to take over the company in exchange for this debt. That is why we are inviting them to the privatization tender," Borisov stated. Meanwhile, the German bank KfW has warned BDZ that it has violated its loan contract with the transformation in 2010 when BDZ was turned into BDZ Holding, transferring all of its assets to its subsidiaries – BDZ Freight Services and BDZ Passenger Services. It is still unclear whether Siemens and KfW have been approached with the idea; if Siemens accepts the offer, they will acquire BDZ Freight Services, which has a 75% market share in Bulgaria, and was valued at BGN 200 M during its first privatization attempt. Bulgarian state-owned railway co BDZ is a state of dire crisis, as in early July Finance Minister Simeon Djankov terminated the state subsidy for the company – about BGN 13 M per month for its failure to serve a World Bank loan of USD 80 M dating back to 1995. "Ever since the state subsidy of BGN 13 M monthly has been blocked, we are unable to figure out what the Finance Ministry wants from us in order to restore it," BDZ CEO Yordan Nedev is quoted as saying. Nedev has not denied the possibility of a gradual shutdown of BDZ because of the total lack of funds.
Source: mediapool.bg (03.08.2012)

"The subsidy to BDZ Passenger Services will be fully restored. There will be no layoffs and no termination of train services," Bulgarian Transport Minister Moskovski told reporters after a meeting between the Finance Ministry, the Transport Ministry, and the BDZ management. Moskovski elaborated on the package of measures and reforms that the three institutions agreed upon in order to patch up the situation at the Bulgarian State Railways whose total debts near BGN 1 B. "We have agreed to implement as soon as possible all short term measures to reduce BDZ's expenditures in any way possible," he stated. In his words, the first measure to be implemented will be a major legislation amendment to allow Transport Police and the BDZ conductors to fine free-riders. "Keep in mind that the railways can make millions by cutting the gratis trips," Moskovski said."The state subsidy for July will be paid in full by the end of the year, the way it is stipulated by the law. We will work out the details in the next couple of days. There is no reason not to allocate the money," he said.
Source: Capital (07.08.2012)

BDZ and ADIS to be sold by Christmas The freight business of the ailing Bulgarian railway carrier BDZ and the Agency for Diplomatic Properties in Bulgaria ADIS will be put on the counter by the end of 2012, said Emil Karanikolov, chief of the Agency for Privatization and Post-Privatization Control, in an interview with Investor.bg. In a letter sent to the company last week we requested an update of the BDZ freight business’ appraisal, he added. The Agency will be cooperating with international finance consultants to find potential buyers for the two state-owned companies. Ernst&Young have already agreed to help Bulgaria’s privatization regulator. I hope we will draw the interest of other consultants as well, because most of the big, strategic investors do not know the Bulgarian market very well, Karanikolov said. He explained that the price of the freight service of the BDZ needs updating, as assets are being withdrawn from the company’s capital to be transferred to the Transport Police Service. Some assets will in turn be transferred from BDZ Passenger Services Ltd to the company’s freight business. So, the new privatization procedure will be announced after the abovementioned transfers are completed. Unlike, the ailing BDZ Freight Services, ADIS has stirred high interest among foreign investors, Karanikolov said. We have already received a number of enquiries from big international companies, including the consultants that we contacted to sell BDZ. In September, the state will also put on the counter its minority shares in the energy utilities CEZ and E.on.
Source: Standart (22.08.2012)

The Bulgarian National Audit Office will inspect BDZ Passengers Parliament asked the National Audit Office to audit the activity of BDZ Passengers for the period January 1, 2011 – September 9, 2012. During the discussion on Wednesday the opposition urged the executive power to make the necessary inspection. The audit should be ready by 2013 and be submitted to the National Assembly in March. Vanya Doneva from Citizens for European Development of Bulgaria (GERB) said that one of the main reasons was the high amount of public funds managed by the company. These amounted to BGN 180 mln in 2011 and another BGN 20 mln in capital transfers. The second reason is that the activity of the company is of great social and economic importance. “We all know that there are constant problems between employer and employees, some structural changes were made to improve the company's activity, some changes were made to the company's management which is a risk factor and creates the need for an audit,” Doneva commented during the discussion. The third reason she pointed out was that, at present, the National Audit Office has not carried out a full audit of the holding. BDZ Passengers should be inspected, BSP MP and former Minister of Transport Petar Mutafchiev said. However, he asked why the audit has to be carried out on the proposal of Parliament and not as a result of the plan inspection of the Ministry of Transport, Information Technology and Communications, which is the correct procedure, according to him.
Source: Class (20.09.2012)

A Bulgarian-German consortium to analyse the railway sector in Bulgaria Within a year, the Bulgarian-German Consortium InfraCare - TransCare will analyse the railway sector in Bulgaria. The analysis will be conducted in three phases and will be financed by Operational Programme Transport. The three contracts are worth BGN 2,064,000, VAT excluded. This was announced at a press conference where a project for preparing an analysis on the state of the railway sector in Bulgaria under Operational Programme Transport was presented. “The market demand for passenger services will be assessed under the first contract and measures for their optimisation will be projected,” Nelly Stoycheva from InfraCare explained at the press conference. The Transport Ministry expects the analysis to be useful in drafting a project for the purchase of new rolling stock for the Bulgarian State Railways (BDZ) Passenger Services during the next programming period of the operational programme. “An analysis of the administration and the personnel in the railway sector - BDZ, the National Railway Infrastructure Company (NRIC) and the Transport Ministry will be made under the second contract. Proposals for optimisation will be made on the basis of this analysis. The aim is to improve the efficiency of passenger services,” explained Stoycheva. The analysis projected under the third contract will contribute towards improving the work of NRIC within the projected State budget. “Solutions will be proposed for reducing the costs of maintaining infrastructure and optimisation of the centres for the management of transport. The aim is to improve the activities for maintaining the railway infrastructure,” Stoycheva specified. The first and the third contract are for a period of seven months and the second one is for 12 months. During the last month of the implementation, discussions will be held and the results will be announced at final press conferences.
Source: Class (26.09.2012)

Freight transport by state rival The state will create a rival of BDZ-Freight Services, which aims to reduce the cost of future projects for construction of new and repair of old railway lines. This is one of the main goals of the project to change the Law on Railway Transport, prepared by the Transport Ministry. The changes will remove the current ban for Railway Infrastructure (NRIC) to perform transport operations and creates conditions to create a rail carrier. For the first time since January 1, 2002 the same railway company will be able to maintain the railway network and transport by train. BDZ Holding will collapse three months after the sale of BDZ-Freight Services. According to sources the second aim of the change in law is to create conditions to form a new state holding between NRIC, BDZ Passenger Transport and Transport Constructions and Recovery (TCR). Although all three companies will remain separate in accounting within the future holding, the intercompany indebtedness between them will decrease and stabilize BDZ Passenger Transport and TCR.
Source: Standart (09.10.2012)

A European Court ruling may stop the creation of BDZ-2 A European Court ruling may block the amendments to the railway transport law, the bill on which was published two weeks ago on the website of the Ministry of Transport. According to these changes, the National Company Railway Infrastructure will have the right to provide its own transport. According to railway experts, these changes give the possibility of creating a holding company between the infrastructure and BDZ Passenger Transport. Such a holding pattern currently exists in Germany and Austria, where DeutcheBan (DB) and the Austrian Federal Railways (OBB), respectively, are responsible for the infrastructure and perform operator activities. Exactly these two cases, however, are currently at the lawsuit phase at the European Court for the application of criminal proceedings for failure of the First Railway Package. According to the European Commission, the existence of these holdings is against the application of the European requirements for liberalisation of the market. Advocate General at the Court Niilo Jaaskinen said that, legally speaking, the existence of these holdings is legal and does not violate the directives. According to him, there is no legal requirement for the railway infrastructure to be a separate entity from the passenger carrier. If the Court adopts a decision against DB and OBB, then, the eventual unification of NRIC and BDZ - Passenger Transport will result in taking up criminal action against Bulgaria. The topic "pros and cons" of holding structures will be the centre of the upcoming debates on the project about the Fourth Railway package of measures. According to the EC, the carrier should be completely separated from the infrastructure. Late in September, Commissioner Siim Kallas announced that he is sceptical about the ability of the companies maintaining the railway to provide equal conditions for all railway operators, given that they are their competitors.
Source: Class (19.10.2012)

Holding Bulgarian State Railways looks for a company that is to take up security of one of its departments- BDZ Passenger Services in the newt three years. The company announced a public bid under the name of Making nonstop physical armed”guard with firearms and technical resources of both BDZ Passenger Transport’s site and property". The holding is ready to allocate approximately BGN 5.86 million VAT excluded to engage a specialized company to protect its property. The canidate which is to win the order will guard a total of 37 sites in the countires. Apart from physical security the company is expected to set cameras for observation, as well. The public order has a term of 36 months. Candidates are to hand out papers for participation until the 4th of January 2013
Source: investor.bg (12.12.2012)