site.btaEuropean Commission Approves Public Support for Bulgarian Railway Company BDZ

European Commission Approves Public Support for Bulgarian Railway Company BDZ

Brussels, June 16 (BTA correspondent Nikolay Jeliazkov) - The European Commission has concluded that Bulgarian support measures in favour of the publicly-owned railway incumbent BDZ are in line with EU state aid rules. The measures will allow the company to address its debt level without unduly distorting competition in the Single Market, the Commission said in a press release on Friday.

In 2011, Bulgaria notified a restructuring plan for BDZ to the Commission for assessment under EU state aid rules. The initial plan included several measures that could give an economic advantage to BDZ and therefore could involve state aid within the meaning of the EU rules. In November 2011, the Commission opened an in-depth investigation as it had doubts concerning BDZ's long-term viability, the press release recalls.

The investigation found that the planned cancellation of debts amounting to 224 million leva (around 114 million euro) is in line with the Commission's 2008 guidelines on state aid for railways. This is because: the debts were clearly determined and incurred prior to Bulgaria's EU accession; the debts are directly linked to BDZ's transport operations and are hindering the company's sound financial management; the amount of the debts to be cancelled is proportionate; and the state aid does not prevent effective competition on the market.

As BDZ is the only provider of railway passenger transport in Bulgaria, it is of crucial importance to the country's connectivity and economy. The Commission concluded that the debt cancellation is necessary and proportionate to support BDZ's operation and in line with EU state aid rules.