BDZ reports 150M leva debt

Bulgarian state rail company BDZ is 150 million leva in debt, with 20 million leva accumulated in the nine months since the turn of 2009 alone, the Sofia Echo reports. By the end of the year this is speculated to reach 40 million, the new CEO of BDZ Pencho Popov told Dnevnik on October 13 2009.
Regardless of the difficult times, BDZ will not increase ticket prices. On the contrary, "it is looking for alternative ways to become more attractive to customers," Popov told the media.

As of October 1, 1330 staff were made redundant, with 700 to follow on January 1 2010, comprising 12-13 per cent of the company's total workforce. Popov has vowed that all departments and administrations within the BDZ that have duplicating functions will be axed.

"We are banking on the state allocating us 165 million leva for 2010 to subsidise the expenses of pensioners and others on welfare and supplementary benefits," said Popov.

His assessment is that the current state of BDZ is attributed to a number of interrelated factors, notably the seven to eight per cent decrease in passenger traffic and the more than 45 per cent slump in freight, which have contributed to a decrease in revenue of more than 20 per cent. The aforementioned are as a consequence of both the global economic downturn and the closure of the Kremikovtzi steel plant.
The accumulated debt of both state run companies, BDZ and the National Railroad Infrastructure Company (NRIC) amounts to nearly 500 million leva, according to Transport Minister Alexander Tsvetkov. Earlier on September 1, NRIC announced that as part of its money- saving and restructuring programmes, it would temporarily withhold 30 per cent  of its employees' monthly wages by the end of 2009 in another drastic measure to keep afloat.

The entire management board BDZ was replaced by Transport Minister Alexander Tsvetkov on October 7 when Popov was appointed the new CEO.

Source: Transportweekly