Another controversy regarding the status of BDZ-Freight Services

The latest controversy regarding the sale of BDZ-Freight Services emerged today after Russi Statkov, member of the Supervisory Board of the Privatisation and Post-Privatisation Control Agency, warned that the procedure for the company’s divestment might be vitiated. The Bulgarian State Railways is on the prohibitive list for privatisation and a decision of the Government and the National Assembly is necessary in order to sell part of it.

However, the Privatisation and Post-Privatisation Control Agency commented that its Supervisory Board is a political body and denied Statkov’s statement that a decision of Parliament is necessary for BGN-Freight Services. According to sources of Klassa, however, the letter of the Ministry of Transport, setting the criteria to be met by bidders for BDZ-Freight Services, has been withdrawn. The document projected that the company should be sold to a strategic or financial investor, applying the scheme used in the case of Bulgartabac Holding. Strategic investors are required a turnover of at least €500 mln for each of the last three years and financial investors - to have equity capital of €25 mln and to have managed assets of €1 bn in each of the last three years.

Despite these high criteria, investors have shown preliminary interest in the company. Possible candidate buyers of BDZ-Freight Services are Germany’s Deutsche Bahn and private railway operators from Romania, Turkey, Spain and Russia. According to experts, the Turkish carriers could ensure a strong flow of cargoes since five companies from Turkey have already announced their interest in BDZ-Freight Services for transportation of their cargoes through Bulgaria. Chinese operators might also be interested because China is building a high-speed railway to Europe via Turkey. Their main motive is the promise for commissioning in 2014 of the railway Plovdiv - Svilengrad – the Turkish border - Istanbul - Asian part of Turkey through the Bosphorus tunnel.