Metodi Hristov, Head of Passenger Services with the BDZ Holding, in an interview for Radio Focus’ broadcast This is Bulgaria.
Focus: The Bulgarian Ministry of Finance transferred BGN 14 million to the BDZ Holding, i.e. the state’s upkeep for July. I would like to remind you that Minister of Finance Simeon Dyankov stopped this upkeep in the middle of July, as the state had to make payments for a non-performing loan of Bulgarian State Railways (BDZ), taken in 1995 worth USD 80 million. The properties of BDZ, around 1,000 buildings including the head office of the holding on 14 Ivan Vazov str in Sofia, remain property of BDZ, but could be seized any moment and be used as collateral for BDZ’s old debts. This situation raises many questions, which we expect Metodi Hristov, Head of Passenger Services with BDZ, to answer.
Mr Hristov, how come the buildings are both transferred to the Ministry of Finance, and in the same time are owned by BDZ, and can also be used as collateral for old loans? What is the actual situation with the properties of BDZ Holding? What is their fate?
Metodi Hristov: Their real fate is the same as it was a week ago, or a year ago. Currently they are not transferred, but we have proposed a list of buildings to the Ministry of Finance, and the ministry will decide which buildings exactly they would accept as collateral. And this collateral is just as normal as any other collateral. No property has been transferred, for now. If you take a mortgage loan from a bank, for example, your property will be transferred as collateral, but you would still own it.
Focus: Mr Hristov, will BDZ Holding continue using the buildings, and under what conditions?
Metodi Hristov: As I already told you, nothing has changed with regards to the properties of BDZ Holding. The properties are in the balances of the different companies from the holding. If these buildings are sold, they will be transferred to the balance of, for example, the Ministry of Finance.
Focus: This was the subsidy for the month of July, i.e. the state upkeep. What are the conditions under which BDZ Holding will receive the upkeep for August?
Metodi Hristov: The conditions are the same as before. We reached an agreement, during the meeting we had with the Ministry of Finance, about the subsidy for July and the one for August. The holding will have to provide collateral security for its old loan. BDZ Holding owes around BGN 28 million, for which we will have to provide collateral.
Focus: In order this amount to be secured with a collateral, will there be any change in the social services that BDZ Holding provides?
Metodi Hristov: They will continue as before. We will not have to stop any trains. There was a real danger for this to happen, but it was excluded as an option. This means that we will continue providing the same service as before.
Focus: I suppose that because of your financial difficulties you will have to raise the prices of tickets. When will this happen, and how much will the tickets be raised?
Metodi Hristov: Basically, the raising of prices of tickets happens only after an approval and a sanction from the Ministry of Transport. I do not think that there is any chance for raising the prices of tickets before January 1, 2013. I also think that if there is any price increase of the tickets, it would not be higher than 9-10%.
Focus: Immediately after your meeting with Minister Dyankov, Vladimir Vladimirov, Chairperson of the Board of Directors of BDZ Holding, said that one of the main questions that had to be resolved as soon as possible was to eliminate the fuel theft, and another one was to limit and possibly eliminate travelling without tickets, i.e. fare dodgers. Have you made any progress in these two fields?
Metodi Hristov: We have been working very actively towards eliminating the so-called fare dodgers, as we have also proposed legislative amendments. We have sent our opinion to the Ministry of Transport and are expecting the ministry to propose the respective legislative amendments, which would limit fare dodgers.
Focus: What will these amendments include?
Metodi Hristov: I cannot tell you exact tests, and it is not necessary, but I will tell you what the desired effect is. Currently, if a person does not buy a ticket on the station and gets on the train, and then refuses to buy a ticket in the train, it is very difficult for the authorities to make the fare dodgers get off the train. This might sound like a paradox, but the authorities also do not have any legal grounds to issue a fine to the fare dodger. These are the main things that we want changed. After the legislative amendments I hope that we will have officers, either from Transport Police or hired by the carrier, who will issue such fines.
Focus: What about the fuel theft issue?
Metodi Hristov: We have been working in this regard for a long time, as well, and we have adopted many measures. I could say that they give certain results. One of the measures, as you know, that we introduced was the installation of GPS systems. We are currently trying to modernise these installations by adding display readers, which will not allow the train to be started without the presence of an authorised train operator. We are also investing in video surveillance systems at the railway stations.
We also introduced modern systems for allocation of fuel for the diesel locomotives. We have also taken administrative measures; in the past when a locomotive needed to be repaired there were many cases when it entered the repair shop with a full tank of fuel and exited with an almost empty tank, i.e. the fuel “disappeared”.
From all of the measures we have adopted, the financial effect for BDZ Holding will be around BGN 1-2 million less expenses for fuel per year. We have also started revising our expenses plan on every six months. If too much money is spent on a certain budget item, we reduce it. This has led to very good saving of expenses over the last few months.
Focus: And my last question, which our audience probably is most interested in; when will the quality of the service, provided by the BDZ, be improved?
Metodi Hristov: Unfortunately, I can divide my answer in two parts – the things we are currently doing; and the things we will do in a long-term perspective. The things we are currently doing are connected with training cessions and seminars, where we try to improve the staff’s attitude towards customers, i.e. being more polite, more helpful, and etc. We are trying to back our efforts with a bonus system, which have not yet introduced. I can also say that we are trying to speed up the rehabilitation of the passenger cars, unfortunately we are currently experiencing a serious shortage of passenger cars, because of the several years in which no passenger cars have been rehabilitated. Around 169 passenger cars are currently being rehabilitated, but there are delays in the factories, which rehabilitate them. We are also preparing a tender procedure for the rehabilitation of another 177 passenger cars. We will also have a tender procedure in 2013 for rehabilitation of passenger cars, but we are still working on the exact number of cars. We will improve a part of our service very soon, as we are waiting for the new 30 sleeping cars, which are ready, but are pending certification. Unfortunately, their certification took longer than we expected, as we were hoping to start using these cars this summer season.
I think that in a long-term perspective, the project we are really waiting for is the absorption of around EUR 300 million from the European Commission for new trains, locomotives, and cars. This is a realistic project, which can happen. Naturally, there are certain requirements that we need to fulfil as a company. I truly hope that this project will be realised in 2014-2015.