Projects with hundreds of million euros still missing, questionable public procurements, outstanding debts and an EU investigation which could lead to 400 million euros in penalties. This is what the recently appointed Bulgarian Minister of Transport Georgi Peev found after his first 30 days in office.
The issues concern all segments of the rail industry, from infrastructure management to freight and passenger transport. Peev painted quite a bleak picture, highlighting “serious accumulated problems that require not cosmetic changes, but a complete change in the way of management”.
Projects for 764 millions with no funding
When it comes to infrastructure projects, Bulgaria “has taken on over 764 million euros in obligations without secured financing”, according to Peev. In addition, there are some contracts considered suspicious, including one for 43 million euros for bush cutting which was terminated.
“Cases of non-transparent emergency repairs, advances paid without actual implementation and the launch of projects without completed expropriation, archaeological and geological procedures have been identified” the ministry said in a note. Peev also underlined how the European Public Prosecutor’s Office is investigating 17 contracts for railway projects in Bulgaria
Alstom’s locomotives at risk?
The Bulgarian rail freight arm BDZ Freight is not doing much better. Peev found debts and liabilities for over 60 million euros, with over 80% of them being long overdue. Moreover, the ministry claimed that the company is working with “contracts at prices below costs”, questioning its financial stability, calling for urgent measures.
Another significant issue pertains to the delivery of 23 new electric locomotives from Alstom. “Although the contract has been signed, the necessary financial resources of 356 million euros have not yet been secured”. Moreover, Bulgaria has not prepared for the future maintenance of these units, as the necessary modernisation of depots has not yet started.
In addition to the EU investigation mentioned above, the European Anti-Fraud Office is also keeping an eye on Bulgaria. More specifically, it is inquiring into two contracts for the supply of rolling stock. “If violations are identified, there is a risk of financial corrections in the amount of about 400 million euros,” Peev stressed.
Passenger branch is struggling too
Lastly, BDZ’s passenger company has 30 million euros in debts, the ministry stated. “There are also risks in terms of the maintenance of Siemens trains, which serve nearly half of the railway network in the country. There is no timely preparation for the servicing of the new electric multiple units that are about to be delivered”.