Economic Policy Review ISSN 1313 - 0544

Transport sector

29.01.2007
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Negative outcomes:


1. The government does not intend to privatize the Bulgarian State Railways (BSR); the company incurs substantial losses every year; it has not been able to reach a break even point for years;

2. The national company “Railway infrastructure” is still a state property and is being managed inefficiently;

3. There is a great delay in all of the significant infrastructure projects, including Sofia airport and Danube bridge 2;

4. The concession of the “Trakya” highway is an accurate example for how not to contract out activities;

5. No concession contract has been signed yet for the civil airport in Rousse (Straklevo village);

6. No concession contracts has been signed yet for the following terminals: Lom, Rousse-West, Vidin-North, Ferryboat complex Vidin, Vidin-Center, Rousse-East, the airport in Gorna Orjahovitsa, Sofia Central Railway Station, Plovdiv Railway Station and others;

7. Navigation Martime Bulgare (Navibulgar) and Bulgarian River Shipping has not been privatized yet;

8. A huge amount of infrastructure projects have been launched without any publicly available calculations and analyses to what extent and if they would be able to justify the invested budget money at all;

9. An amendment has been introduced into the Law on Automobile Transportation, which has put a ban on operations of transport providers using vehicles older then 4 years;

10. European railway companies will not be allowed to work as internal operators in Bulgaria at least until 2012. This measure is necessary, so the government, because Bulgarian State Railways are not able to compete with West European operators, which is in fact very true, but is at the same time by no means a good reason for protecting it, just the opposite – to privatize it.

11. The following companies owned by the Ministry of Transport incur losses and thus need to be privatized:

 

State owned companies sustaining losses

Losses accumulated in 2003 and 2004

(thousands lv.)

1. Port of Bourgas

5 307

2. Port of Varna

856

3. Port complex Lom

93

4.  Martime Bulgare (Navibulgar)

26 974

5. DP TSV

2 690

6. Railway infrastructure

16 989

7. Bulgarian State Railways

28 369

8. TDKC Rousse

77

9. TDKC Bourgas

132

10. TDKC Stara Zagora

69

Total loss (thousands lv.)

81 556

Net loss (thousands lv.)

38 990

Source: Ministry of Transport -  http://www.mtc.government.bg/page.php?category=177&id=472  (Bulgarian)

 

Positive outcomes:

1. Low-cost air carriers were allowed to participate in the market;

2. Concession procedures have been completed for the following terminals: Balchic, Ferry boat Silistra, Svistof and Orjahovo;

3. Some of the planned concession and privatization procedures have successfully started;

4. The completion of the concession procedures for the ports of Varna and Bourgas is in progress.