AN additional 14 million leva is to be given from the national budget to Bulgaria's national railways, BDZ, to cover the shortfall caused by allowing some passengers to travel at reduced fares.

This was announced at a conference on railway traffic safety, organised by BDZ last week.

Earlier, Transport Minister Nikolai Vassilev tried to persuade the Finance Ministry to give a 50 per cent increase to the budget of BDZ for next year.

The 2003 budget subsidy of the state railways is 70 million leva.

According to Dimitar Gaidarov, general director of the railway company, 24 million leva must come from the Roads Executive Agency, but so far the agency has transferred only five million leva. This year BDZ received 153 million euro as a grant under the ISPA program and a 150 million euro loan from the European Investments Bank.

BDZ has debts amounting to 168 million leva. The state-run company cannot carry out planned repairs for lack of funds.

BDZ coaches are 30 or more years old, while the rails were installed a century ago. The company has been short of funds for upgrading its cars, engines and rail infrastructure since 1980s. It last bought new trains and engines in 1996. The management of BDZ has already announced that it needed one billion leva of investments to boost transport safety and 3.6 billion euro to improve railway infrastructure and quality of services by 2012.

BDZ registered a 10 per cent rise in cargo volume and a six per cent increase in the number of passengers in the period from January to September compared to the same period last year, but this has not been enough to cover the loss.

The conference on safety was held in one of the major railway junctions, the town of Gorna Oriahovitza. The forum was attended by Deputy Transport Minister Anelia Krushkova, who delivered a report on the main development within European legislation as regards railway safety with a view to the harmonisation of the safety rules in member states and the establishment of the common European market. She said that the main priority in the future investment policy would be projects to improve the quality of rail transport.

Reports, presented by the CEOs of NRIC and BDZ EAD, described in detail the present technical condition of rolling stock and infrastructure and the problems, arising thereof. The investment needs of the two companies were also stated.

Krushkova presented awards for incident-free work and excellent performance of duties to staff from Gorna Oriahovitsa and the regional safety inspectorates.

The conclusions of the forum included that, currently, rail transport can be defined as safe; transport safety has been and will be the main priority; that currently, the quality of transport services remains at a low level; that the integration of the Bulgarian railway system to the Pan-European one calls for the active efforts of all relevant bodies.

A number of proposals were made.

These included the acceleration of repairs to the permanent way and installations with a view to the optimisation of the network by 2006; step-by-step introduction of new organisation of train traffic as of 2004; step-by-step introduction of container and Ro-La transports by 2006; exemption of infrastructure charges and state budget subsidies for the railways from VAT; and separation of freight from passenger business activity in accounting terms.