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BDZ TO GET TRAINS INSTEAD OF VAT ON STATE SUBSIDIES

It depends on the Ministry of Finance whether the Bulgarian State Railways (BDZ) will acquire new high-speed trains. The money for new trains may be provided, if the State subsidies for the railways are exempt from VAT, Yordan Mirchev, Head of the Parliamentary Transport and Communications Committee, proposed. If this is stipulated in the 2004 Budget Act, the high-speed trains may start serving the lines from Sofia to Bourgas and Varna in 2005, Mr. Mirchev forecasts.The idea was also supported by the Minister of Transport and Telecommunications, Nikolay Vassilev, who promised to present it to the Finance Ministry. At present, a BGN14MN value-added tax is calculated on the BGN70MN subsidies. This money could be used for the purchase of trains instead, Nikolay Vassilev explained. The ticket for this train will be more expensive, because the service quality will be at European level. The distance from Sofia to Varna will be traveled for 6 hours, and that to Bourgas - for 5 hours. Actually, this is the first time for the past 13 years that BDZ reported an increase of the freight and passengers traffic. The growth registered in the three quarters of 2003 is 10% and 6% respectively, BDZ managers announced. Mr. Vassilev said that he was negotiating with the Finance Ministry for a 50% raise of the budget funds for the national Railways Infrastructure company in 2004. For 2003, the budget of the state-owned company amounts to BGN44MN, of which BGN20MN come from the Treasury, and BGN24MN - from the Roads Executive Agency. So far, the agency has only paid BGN5MN, Dimitar Gaidarov, General Manager of the company, complained. Another problem is the reduced speed of Bulgarian trains. More than a third of the country's railway roads are in a poor condition, and the speed there is reduced by 25 per cent, Mr. Gaidarov added.

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