Bulgaria's cabinet decided Wednesday to transfer the ownership of the troubled Sofia heating utility “Toplofikatsiya” to the City Hall, the Council of Ministers reports.

Until now, all shares of the company were owned by the Ministry of Economy, Energy and Tourism.

The cabinet of the Citizens for European Development of Bulgaria (GERB) party is transferring all “Toplofikatsiya” assets and debts. A while ago, the City Hall said they wanted the heating utility back, but without the staggering debt to the gas supplier “Bulgaragaz” with the motive it had been accumulated over policies of the previous, socialist-led cabinet.

The Council of Ministers explained Wednesday in their press release that such move would be risky for the country in the light of EU regulations about State assistance and the methods used by the EU statistical office, Eurostat, to determine the budget deficit.

The cabinet backs their decision about the heating utility with the fact it had been created as a municipal company; its infrastructure is part of the one of the capital city; it could become included in the system of waste recycling in Sofia by using the fuel from the future waste treatment plant to be completed by 2012; it could apply for EU financing from the energy efficiency funds.

The deal, however, will be finalized only after the City Hall issues their decision. They have already stated that even with the large debt, the company is attractive for investors, but ask for legal changes to allow them to collect payments from customers more efficiently since now those who fail to pay their bills are sent to court, prolonging the process indefinitely.

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