The prioritisation of the railway reform ensures the optimisation of competitiveness and does not require an increasing state support. Therefore, the reform has to be adequately applied to mark the beginning of economic growth. European railway market integration has to play a significant part in shaping a single railway area which cannot exist in conditions of state monopoly, while the privatisation of national freight operation is an important step towards opening competition in the freight sector, improving services and increasing carried volumes.
In this context, the Bulgarian authorities have initiated the privatisation of the freight branch of the Railways, BDZ Cargo. Although initially the press wrote about a potential failure of the sale in June, the Privatisation Agency in Bulgaria announced that there were companies interested in the acquisition of the operator and Transport Minister Ivaylo Moskovski expressed confidence that there would be offers from Turkey and China, due to “political signals”. In an interview for our magazine in June, Yordan Nedev, the Executive Director of BDZ Holding, declared that “we expect to conclude the choice of a buyer by the end of the year. I am though quite positive about this scenario. he company is stable on the market, improving the service and the business model to one that suits its assets better, and is on a clear path to profitability thus becoming an attractive shot”.
In July, the Privatisation Agency in Bulgaria announced that the deadline for submitting offers in the acquisition of BDZ Cargo is October 29, 2012 and for presenting documents for the preliminary qualification is September 18, 2012. In the sale of BDZ’s freight division, 2,325,087 shares could be bought representing 100% of BDZ Cargo. The agency also announced that the documents had been bought by lawyers and by Tria Railway Bulgaria, a subsidiary of the Spanish company, Ingenieria y Tecnica del Transporte TRIA. It is not clear who is represented by the three lawyers who bought documents for their clients. It is rumoured that some of the candidates are backed by the Bulgarian subdivision of Russian Vneshtorgbank and banker Tsvetan Vasilev. Other two companies which were interested in “BDZ Tovarni Prevozi” were Romanian Grup Feroviar Roman and Czech Advanced World Transport. Bulgaria Dnes daily adds that other sources have it that First Investment Bank was also inte-rested in the freight transport operator.
To be able to take over the company, the future buyer of the national freight division will have to be ready to invest at least EUR 50 Million in the acquisition of new locomotives and wagons in the first year after the takeover. The company’s cost according to Vladimir Vladimirov, President of BDZ. Varies between EUR 130 Million and EUR 60 Million and the Privatisation Agency has valued BDZ;s freight division at BGN 190-250 Million (EUR 97-128 Million).
The Bulgarian company owns 799 real estate possessions all around the country. The land possessions amount to 1,129,779 m2. The company owns 139 locomotives and 4,848 wagons and, according to the Privatisation Agency, “it is expected some of the wagons to be discarded and replaced by 321 cargo wagons and 5 passenger wagons”.
The exploitation and maintenance of the wagons is carried out in specialized shops.
In 2010 the company had a net income of BGN 137 Million (EUR 70 Million), in 2010, BGN 153.7 Million (78.6 Million) and in 2011, BGN 185 Million (EUR 94.8 Million).
In 2009-2011, BDZ Cargo has amounted losses that in 2011 were estimated at BGN 17 Million (EUR 8.7 Million).
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