Bulgaria has been saved from an unlimited mass strike of its railway workers with a last-minute deal in which the government appears to have bowed to the pressure of the unions.

The syndicates have been up in arms on a number of issues concerning the state policies towards the railways, most important a loan agreement with the World Bank, which was expected to lead to the layoffs of some 7 000 out of a total of 28 000 railway workers.

After at 10 am on Thursday, the workers from Bulgaria's two state railway companies BDZ ("Bulgarian State Railways", a passenger train operator) and NKZI ("National Company Railway Infrastructure") staged a one-hour warning strike that stopped 52 out of a total of 60 trains running at that hour, the government and the syndicates restarted their talks.

The agreement between the government and the syndicates was reached shortly before midnight on Thursday, announced Valentin Nikiforov, Vice President of the Confederation of Independent Bulgarian Syndicates KNSB. The deal came after 9 hours of incessant talks and just 8 hours before the mass strike was supposed to kick in at 8 am Friday morning.

Few details have been provided about the specifics of the agreement but the major point is that the government is not going to carry out the feared massive layoff of workers presumed by the World Bank loan agreement. Instead, the management of the two state railway companies will reduce their administration.

The government has also succumbed to a number of the social demands of the railway unions, including the payment of delayed social benefits, and certain retirement provisions.

Nikiforov has pointed out that almost all of their concerns have been met in the new agreement. He did point out, however, that the syndicates also made compromises.

"We managed to reach an agreement on almost all issues, with mutual compromises. These are compromises accepted by our colleagues because we are well aware of the financial condition of BDZ. The situation of the infrastructure company NKZI is better but there are big issues there as well. You know how it is during a crisis when the freight traffic is low – things are just difficult," Nikoforov said thanking all workers who staged the one-hour strike on Thursday as it helped to lend credibility to the cause of the syndicates.

If the talks had failed, Bulgaria would have seen a mass strike in its railways every day from 8 am till 4 pm for an unlimited period of time. Over 80% of the workers of NKZI and 73% of the workers of BDZ have backed the mass strike.

Up to 7000 railway workers might be laid off from the two state companies as Bulgaria is bidding to receive a badly needed loan of BGN 600 M for the sector from the World Bank – BGN 460 M for BDZ, which handles the passenger and freight traffic, and BGN 140 M for the NKZI, which is in charge of the railway infrastructure.

The situation of BDZ is particularly grave as the company's total debts amount to BGN 1 B; last week the Cabinet decided to provide the company with a state loan of BGN 140 M to cover its current debt payments.

The World Bank is ready to provide the BGN 600 M loan (for which a memorandum was signed in December 2010 in Sofia) to Bulgaria on the condition that the spending for personnel for BDZ and NKZI are reduced by 30%. The companies employ a total of 27 000 people, and up to 7 000 are expected to lose their jobs if the World Bank offer is accepted.

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