BULGARIA SAYS SPLIT STATE RAILWAY TO END MONOPOLY

Views on BG | January 9, 2002, Wednesday // 00:00

Reuters

Bulgaria has restructured indebted state railway company BDZ by splitting it in two, ending its monopoly in the sector, the Transport Ministry said on Wednesday.

Reforming BDZ was a key element in Bulgaria's $300 million plan agreed last month with the International Monetary Fund, and is essential for the successful completion of European Union membership talks.

"Restructuring has been launched from January 1, and BDZ is divided into two separate state companies -- one managing the railway infrastructure and another a railway carrier," Deputy Transport Minister Lyubomir Ivanov told a news conference.

"This effectively ends BDZ's monopoly in railway transport," he said. The restructuring of BDZ has not affected rail fares. Bulgaria, which opened EU membership talks in 2000, hopes to join the bloc by 2007. The IMF, whose board of directors is due to approve the new funding deal in February, has urged Bulgaria to cut unprofitable BDZ lines, reduce staff and sell some of its assets.

BDZ was expected to post a loss of 120 million levs ($54.7 million) in 2001, after a 90 million lev loss in 2000, Transport Ministry officials had said. Ivanov said he expected government approval for a ministry proposal to transform a 127.5 million ($58.2 million) debt inherited by the railway carrier from BDZ into a capital rise distributed in shares with a par value of 10 levs. The two railway companies will continue to rely on subsidies from the state, which this year will total 70 million levs, 10 million levs higher than in 2001.

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