Earning revenue

In theory, passenger trains are the only BDZ activity which is subsidised by the state, under a long-term agreement which allows discount travel to a number of groups, including school pupils and university students and pensioners.  

In reality, BDZ’s own data shows that only tickets sold for its express trains cover to a large extent the real cost of travel. All the rest are sold at less than their real value, which is made up on the basis of fuel costs, rental of train carriages, repairs and maintenance costs and infrastructure fees.      

To get more passengers, state railways long ago started considering the idea of introducing combined tickets for buses and trains. Until now, this has only been done with group travel but not for individuals.

A few weeks ago, Tsvetkov said that he intended to merge BDZ’s three sections: passenger services, cargo services and the company’s locomotives. Private companies’ representatives reacted immediately by saying that they would ask the European Commission and the Competition Protection Committee to intervene if, as a result of such a move, BDZ’s cargo services get some of the state subsidy allocated to its passenger services.

According to Transport Ministry calculations, a 60 per cent staff cut in BDZ’s administration – which for the past 10 years has grown faster than the rate of cargo and passenger transport services – would save a million leva  a year. This saving, however, looks ridiculously small given the company’s 290 million leva deficit. BDZ’s train carriages repair units have potential for staff cuts of about 30 to 50 per cent.   

Tough decisions
A report done by private consultants hired by the Transport Ministry six months ago said that the ownership of railway stations should be transferred from NRIC to BDZ while the major railway stations in Sofia, Plovdiv and Varna should be put on concession, which would guarantee income for the state.

According to Kichev, such an idea could be accomplished by asking municipalities to join in, as the land around train stations is in most cases owned by them. There are 130 train stations in Bulgaria which are serviced by 755 people. Of these stations, just 19 make up 81 per cent of the cargo services’ income. According to the same consultancy report, some of the train stations could well be shut down, while others should operate as business centres and sell tickets for all kinds of transportation.   

The most difficult decision facing the Government is to shut down loss-making train lines. These are a number of trains going to small and remote areas but which cost up to six million leva a year. The previous government had plans in this direction but gave up on them because of local mayors’ protests.

Currently just 20 per cent of the existing railway network brings 80 per cent of BDZ’s income. Financial data show that the current Government would not be able to support the company on a standby. What could be next down the line is a decision that train routes would be shut down and replaced by subsided bus transport – amid the protests of municipalities.

Dnevnik daily, Issue 205