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Bulgarian Railways needs EUR 435m to pay off debts and carry out investments

Bulgarian Railways needs EUR 435m to cover debts and carry out investmentsBulgarian Railways needs BGN 849 million (EUR 435 million) to pay off its debts and to carry out the reforms included the 2015-2022 development plan. BDZ Holding is urging the concession of Sofia Airport in order to continue implementing the railway reform, BDZ CEO Vladimir Vladimirov said on Friday, during a news conference on the the company’s operational results for 2010-2016. 

According to Vladimirov, delaying Sofia Airport concession award triggers a higher price of the railway reform.  The debts of BDZ Holding amounted to BGN 849 million and currently they have been reduced to BGN 445 million. An amount of BGN 150 million is extremely heavy obligation under the Second Debenture Loan where the interest is 8.0 per cent.

BDZ Holding posted BGN 67 million losses, of which BGN 25 million were generated by BDZ Freight and BGN 11 millions by BDZ Passenger Services. Among current issues listed by BDZ Holding are:

  • the average age of the rolling stock, which is over above 30-40 years old
  • increased competition in the rail freight market, with eight rail freight private operators gaining market share
  • the lack of 1133 freight cars from inventory discovered back in 2011
  • BGN 32 million bad debts to  Serbian, Macedonian and Greek railways
  • poor working conditions in workshops and depots due to outdated facilities
  • a number of 29 lawsuits with a total exposure of BGN 256 million
  • outdated railway infrastructure which leads to an average speed of 50 km/h

The concession of Sofia airport will make available BGN 420 million (EUR 214 million), of which BGN 210 million for the acquisition of a batch of 15 new electrical multiple unit trains, followed by another 15 units and capital transfers of BGN 35 million in the next six years. This acquisition is part of the BDZ plan for 2015 – 2022, as well as of the company divisions’ business plans for 2017. 

Until 2022, BDZ Holding plans to invest:

  1. BGN 268 million until 2022 for the repair and modernization of the current rolling stock
  2. BGN 5-10 million for improving working conditions in depots and repair workshops
  3. BGN 5-10 million  for new information technologies
  4. BGN 2 million for training
  5. in other 87 reform measures

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