Банкеръ Weekly

Briefs

LICENSE FOR PRIVATE RAILWAY CARRIER READY WITHIN A MONTH

By the end of this month will be issued the long-awaited license for private railway carrier, announced for the BANKER weekly the Ministry of Transport and Communications. The information about active negotiations was also confirmed by REI Holding Financial Industrial Group, which is the parent of the private applicant for the license - National Railway Company AD.Provided negotiations are brought to a successful end, the license will cover both the passenger and freight transportations and will be permanent. This was said by Georgi Nikolov, Director of Railway Administration Executive Agency. He explained as one of the reasons for the eight months' extended talks the necessity for strict examination of all the presented documentation. The main question which was placed by the state-owned institutions, is whether the future private carrier will be able to develop its activity in the long run. When we announce the carrier, the society must know that it will be a loyal competitor on the transport market which will be guaranteed by the Ministry of Transport and Communications, explained Nikolov. That's the reason why candidates are exacted to present more and more new documents.The Financial Industrial Group publicly announced its intentions to participate in the future competitive market of railway transport, shortly after the enforcement of the Railway Transport Act. The Act which was enforced on January 1, 2002, provided opportunity for licensed private railway carriers to compete with the Bulgarian State Railways EAD (BDZ). Only months later REI Holding officially submitted its documents which entered the never-ending circle of the bureaucratic procedures.In a letter to the Ministry of Transport from August 19, 2002, the holding expressed interest in the concessions of the loss-making raiways in the country. Among the railway lines, which have been claimed for, are Levski-Svishtov; Oresh-Belene; Troyan-Levski; Boychinovtzi-Berkovitza; Kalotina-Staniantzi; Aldomiravtzi-Beli Breg; Chukurovo-Vakarel and Sofia-Karlovo-Bourgas. We aim at transferring the loss-making railway lines into profitable ones by investing in high-quality service and thus increasing the revenues from exploitation and infrastructural fees. We even hope we could be able to compete with the automobile transport, said Kiril Ermenkov, Consultant of the holding. Nevertheless, so far no negotiations with the Ministry have been started.The nearly year-long exchange of various documents between the ministry and the private company caused opposition's disapproval. The government is leading controversial policy in this sector, as on one hand, nothing is done for the financial stabilization of BDZ EAD, and, on the other hand, by all means is being prevented the issue of licenses to private carriers, said Blagoy Dimitrov, MP from the United Democratic Forces (UDF). He added that certain circles are forwarding the opinion that the appearance of new operator with mobile equipment will additionally deteriorate BDZ's situation.It has not become clear so far in which lines will unfold the operations of the future private carrier and what will be the schedule of its transports. REI Holding has already started talks for mobuile equipment with some of the biggest producers of wagons, locomotives and equipment, including Siemens and Bombardier. The National Railway Company is now the only applicant to take up private railroad transport. Yet we expect others to appear. The European practice has proved that once a license is issued, many willing partners turn up, said Georgi Nikolov. REI HOLDINGREI Holding Financial Industrial Group unites over 50 companies, including 12 plants in Bulgaria, Russia, Ukraine, Moldova, Greece, Germany and Austria. Its total sales for 2001 reached USD300MN. The Transport Depratment of the group include the enterprises RBP-Koene AD, National Railway Company AD, Megalink AD, Railway Engineering AD, National Research Institute of Transport Ltd and others.

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