Aleksandar Tsvetkov: Excessive spending and unprofessional management led BDZ and NKZI to a state of bankruptcy .
14.10.2009
At a press conference today, the Minister of Transport, Information Technology and Communications Aleksandar Tsvetkov and the Deputy-Minister Kamen Kichev presented the actual financial situation of the railway transport. MTITC completed a detailed analysis of the situation of BDZ and NKZI, stated Minister Tsvetkov, putting an emphasis on the excessive spending and unprofessional management of both companies in the past. The social unrest in both companies is caused by the delay in the salary payments. The main reason for the current crisis in the financial situation of the companies is the unbalanced use of the subsidy, which was spent ahead of time, prior to the first half of the year. Provided its reasonable spending, it could have guaranteed the regularity of the salary payments. According to the Minister, this was a premeditated decision. He presented a report for the subsidy spending for 2009, signed by the Executive Director of BDZ and the previous Minister of Transport Peter Mutafchiev. The document reveals that there were payments for 25 million leva for the month of January and for 9 million for the months of November and December. The latter amount does not guarantee the employees' salaries. Another reason for the irregular payments is the diminished railway activity, leading to the decrease of the income. There is a similar situation at the National Company "Railway Infrastructure." There was 12 million leva for the months of January, February and March, and only 4 million for October, November and December. According to Aleksandar Tsvetkov such distribution of capital is nothing less than "setting a ticking time bomb." We will not allow this kind of distribution of capital next year, thus guaranteeing the regular salary payments, announced Minister Tsvetkov. At the press conference, the Minister announced the debt of BDZ and NKZI. BDZ owes more than 150 million leva. The impending payments to creditors and financial institutions until the end of the year amount to 37 million and for 2010 - 101 million leva. The total shortage of capital equals 290 million leva. NKZI owes almost 100 million leva to its distributors until the end of 2009. At a meeting today at the Council of Ministers, a decision was made to secure additional subsidy for NKZI, made possible by a transfer from the capital program. "These are the only resources that we can provide for the railways. The capital program was almost 90% spent during the first half of the year and this option is quite limited now, "announced Minister Tsvetkov. The protest of the railway workers is justified, but the blame lies with the people who managed the companies this way and spent ahead of time the subsidies, emphasized Aleksandar Tsvetkov. Actions have been taken for the immediate restructuring of BDZ into a market-oriented company. A drastic reduction of the management staff is planned. The departments will be reduced from 16 to 6 and the offices from 59 to 25. This will lead to the dismissal of over 60% of the upper management of BDZ. There will be 1 million leva income as a direct result from the reduction of the administrative staff. MTITC conducted investigations into a series of scandalous deals for the sale, supply and recycling of train cars. All investigations have been handed to the prosecutor's office. This mismanagement demonstrates the need of a full audit of the railway system that has already been ordered by Minister Tsvetkov and will be conducted by a prominent audit firm. By the end of the year, Minister Tsvetkov will hold a meeting of all the creditors and will discuss the possibility of deferring the repayment of all the credits and major debts. For additional information:
Vera Deianova, Press Centre,
Ministry of Transport, Information Technology
and Communications
Phone: 940 95 34
E-Mail: vdeianova@mtitc.government.bg |