Bulgarian Railways CEO Resigns Because of Finance Minister

Business | August 22, 2012, Wednesday // 14:32
Bulgaria: Bulgarian Railways CEO Resigns Because of Finance Minister Yordan Nedev has quit as CEO of BDZ because of Finance Minister Simeon Djankov, not because of "personal reasons". Photo by BGNES

The CEO of the Bulgarian State Railways BDZ Yordan Nedev, who resigned earlier on Wednesday, has done so because of the Finance Ministry, Nedev himself explained.

Shortly after Nedev's resignation from the CEO position of the highly indebted Bulgarian Railways, Transport Minister Ivaylo Moskovski explained the manager's move with "personal reasons".

However, Nedev has made it clear that he resigned because of the crisis in July and early August in which Finance Minister Simeon Djankov withdrew the legally allocated monthly state subsidy of BGN 14 M keeping the railway company alive.

Nedev had been complaining of a denigrating treatment on part of Djankov and the Finance Ministry before he chose to step down on Wednesday.

The CEO post at BDZ will be temporarily taken over by the present financial and administrative director of the company Velik Zanchev, the Bulgarian National Radio reported.

Nedev recently declared that passenger trains will have to stop in mid-August if the government does not restore the legal subsidy of the severely indebted company.

The Finance Minister suspended the state subsidy for BDZ in mid-July because the company was not paying installments on a state-guaranteed loan of USD 80 M taken from the World Bank in 1995.

Bulgaria's Finance Minister Simeon Djankov agreed to restore the  subsidy on August 6, 2012, but only after the BDZ management agreed to provide more than 1000 real estate properties as a guarantee of the loan repayment that could be disposed of at any moment by the Finance Ministry.

Djankov had given the BDZ Holding one weekend to come up with new reforms to save the company; this happened as BDZ was about to collapse financially as a result of Djankov's decision to withhold the BGN 14 M subsidy for the state railways in July even though BDZ is entitled to it by law.

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Tags: finance minister, Simeon Djankov, Finance Ministry, state railways, BDZ, state subsidy, loan, World Bank, Bulgarian State Railways, subsidy, CEO, Transport Minister, Ivaylo Moskovski, Yordan Nedev, resignation
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