site.btaMajor Restructuring Begins at Bulgarian State Railways – Cargo

A major restructuring of Bulgarian State Railways – Cargo (BDZ Cargo) is underway, including cost reductions and a review of all freight tariffs, Deputy PM and Minister of Transport and Communications Grozdan Karadjov said Monday during a meeting with Plamen Dimitrov, President of the Confederation of Independent Trade Unions in Bulgaria (CITUB), CITUB representatives, and the leadership of Bulgarian State Railways (BDZ) and the National Railway Infrastructure Company (NRIC), Karadjov’s Ministry said in a press release on Monday.

"Nearly half of all freight transported by rail in Bulgaria is handled by BDZ Cargo, with the remainder managed by private carriers. However, last year’s figures show the company posted a turnover of BGN 140 million, while overdue liabilities reached BGN 33 million," Karadjov said. According to him, any private entity with such financial indicators would have declared insolvency.

"We have currently restricted all external spending to avoid accumulating more debt," Karadjov added, noting that his ministry is looking for options to sell off non-operational assets that are incurring major costs. BDZ Cargo pays up to BGN 250,000 monthly just to park its rolling stock on tracks owned by NRIC, the Minister explained. "I have instructed the company to urgently prepare a list of non-operational assets and proceed with their sale," Karadjov said.

BDZ’s management reported that BDZ Cargo currently owns some 4,500 wagons, while only 2,000 are needed – even with increased freight volume. In addition to surplus rolling stock, other redundant assets include buildings, facilities, and land lots that are no longer in use but continue to generate financial losses to the state-owned company. As an example, the company cited 230 residential apartments owned by BDZ Cargo across the country.

CITUB President Dimitrov said that one of the key issues in the railway sector is ensuring a fair procedure for selecting a passenger rail operator.

Petar Bunev, President of the Railway Workers' Union in Bulgaria, stressed the importance of developing a recovery plan for both BDZ Passengers and BDZ Cargo, including securing maintenance operations for rolling stock.

Karadjov also emphasized that the Transport Ministry has submitted to the European Commission a concept and a set of questions concerning the assignment of passenger rail services in the country. "Once all the details are finalized and before launching the tender, we will hold broad consultations, which I hope will include the trade unions as well," Karadjov added.