Interview of Minister Georgi Gvozdeykov for Railway Transport, the conversation was conducted by Petar Galev
The human factor is the one without which the railways cannot function
For many years, interviews and analyses related to the state railways focused on the survival of the sector in the country. There was no light on the horizon, and the management of BDZ and NRIC were working in constant crises. When Georgi Gvozdeykov took over the ministerial post in transport, he was quite aware that attitudes had changed and public expectations were now related not just to saving the state railways, but to turning them into a modern carrier that would compete with other modes of transport and attract passengers and shippers naturally. And that we are no longer just talking about filling and meeting the train schedule, but about quality, both in terms of rolling stock and infrastructure.
The approach — the state railways to be seen as a normal business from which our country may one day receive a dividend, gives other perspectives to the industry and its workers. This approach, this winning card in management decisions, is exactly what Minister Gvozdeykov has bet on: efforts to improve the image of the rail profession, as well as its earnings, are expected to retain more people in the industry and attract young recruits.
Our railways also have a tailwind in the face of European trends, which have long prioritised train travel as the most efficient, environmentally friendly and safe transport. When our administration actually embraces this as well, and not just pay lip service, we have a chance at a modern rail reality. We sincerely hope that the real steps in the policy pursued by Transport Minister Georgi Gvozdeykov will lead to the long-awaited modern look of the Bulgarian railway infrastructure and rolling stock.
Mr. Minister, a rotation in the government is expected. What has the Ministry of Transport and Communications done so far in the field of rail transport and how do you assess the state of the sector?
From the moment I took office as Minister, I knew that the road to rail modernisation would not be easy. Of course, for me, modernisation in the sector is not only about buying new rolling stock and rehabilitating the infrastructure, but also about a new vision for the management of the two state-owned companies — BDZ and NRIC. For a very long time Bulgaria has not invested in rail transport as other European countries have done. In my opinion, the development of this mode of transport should be seen as a business model because it has a great future.
It will not happen quickly, but I hope that by 2026, when the new trains are due to be delivered under the Recovery and Resilience Plan (RRP), Bulgaria will have a clear strategy and business plan. So far, the sector has relied entirely on subsidy from the state and has lacked any thought for developing this product and providing a service from which the state can benefit. It may sound overly optimistic, but with the right strategy and a good plan, I see no problem with rail generating revenue, being self-sustaining and even profitable in the future.
With regard to Bulgarian State Railways (BDZ), as early as at the end of last year we launched an extensive market study to purchase new trains as soon as possible. You know that the rolling stock that will be delivered under the RRP covers 50% of BDZ's needs and we have to provide the other 50% and we wanted to do that in the short term. The market study was to show us whether the major European companies have trains in stock and whether they are planning production by the end of the current calendar year, which we can take advantage of.
Over the past months I have held a series of meetings with ambassadors from various European countries and we have sent enquiries to all the major rolling stock manufacturers in Europe, with only one objective — to purchase new rolling stock at short notice. And here is the moment to once again thank the German Ambassador Irene Plank, who took our wish very much to heart and helped us immensely. BDZ and Deutsche Bahn are already in the final phase of negotiations for the purchase of up to 70 wagons from the German railways' rolling stock. With these funds, the national railway carrier will modernise more than 20% of the rolling stock currently in use, which is over 40 years old. A team from the Ministry of Transport and Communications, as well as experts from BDZ, visited Germany in mid-February for final negotiations with the German railway carrier. Until the end of last year, these wagons were in operation by Deutsche Bahn on the Intercity lines. Rolling stock is for speeds up to 200 km per hour, air-conditioned, without compartments, open space type, and has all passenger amenities. This is an excellent chance for the Bulgarian society to finally get the much awaited reform in the railway transport, which has not been done for more than 30 years. At the same time, at the end of last year, BDZ signed a contract for the delivery of 10 new Siemens Smartron locomotives. Thus the total number of this series in the country will reach 25 and this will largely solve the problem of the shortage of locomotives. Together with the German wagons we are expecting, the train timetable will be much better and we will drastically reduce train delays.
As far as the National Railway Infrastructure Company is concerned, I think that the company has a potential that is still underused. Investment in rail infrastructure is also not at the level it needs to be. The large-scale projects that the company is implementing have been managed inefficiently and many problems and delays have accumulated over time.
In recent months, a few good things have been achieved that we should mention. The company implemented a modern information system that supports the planning and management of train traffic in the country. It is of great benefit to both the employees of the NRIC and the railway carriers, who can very easily plan their transports and receive reports at any time.
At the end of last year the renovation of Stara Zagora railway station was completed. A modern station complex, which in no way inferior to the Western European. And in December two key projects were completed — the direct rail link between Port of Burgas and the interior of the country and the reconstruction of Iskar railway station.
It is the human factor without which the railways cannot function. That's nearly 20 000 people for whom rail transport is a way of life. People who are dedicated to their profession and that is why they should be appreciated. In late October 2023, I organized a meeting with company executives and system officials. At that meeting, I made a commitment to raise their wages and improve their working conditions.
Since the beginning of the year, salaries in BDZ and NRIC have been increased by nearly 20%. So one part of the commitment is fulfilled. My goal is to make this profession not only competitive in the job market, but also desirable for young people.
How do you see the delivery of the new trains being timed and is there a risk of delay and loss of the Recovery and Resilience Plan funds earmarked for this purpose?
If we have to divide the modernisation of the rolling stock into two parts, the first is the delivery of the German wagons from Deutsche Bahn, which I hope will be in Bulgaria in the spring. The second part is the Recovery and Resilience Plan project, which we are also working on daily basis.
Specifically to the question — we are doing everything possible not to lose funds. We have now started the procedures again. I can boldly say that we are on the right track to implement the procedures and bring them to a successful conclusion. We already have a contract to supply 9 electric shunting locomotives. For the other 9 we will conduct the procedure anew. The procedures for 7 double-decker trains and 35 multiple-unit trains have been reopened, and we have simplified the technical requirements to a basic level as produced and used in Europe. Regarding the order for 20 single-deck trains, we are currently in a direct negotiation procedure with the two bidders who had submitted bids. The Public Procurement Act allows us, if the bids submitted do not meet the requirements, to proceed to the next stage by going to direct negotiation. This means that we are giving the companies participating in the open procedure the opportunity to submit new offers. It is important to note that everything we do in these procedures is transparent and in accordance with Bulgarian and European legislation.
What are the most important projects in the field of railway infrastructure and what problems do you face there?
It is very important that we make significant progress this year on the projects in the Transport Connectivity Programme 2021 — 2027 because we are in the fourth year of the programme period and these are some of the largest projects in the country. In the rail sector, most of the projects have been transferred from OPTTI 2014 — 2020, so there will be no disruption there.
As I mentioned, NRIC is a company with huge financial resources that have not been used effectively over time. Many of the projects have been delayed or suspended due to unfavourable contracts. Of course, I also take into account the circumstances that do not depend on the NRIC — delayed material deliveries, expropriation procedures, inflationary processes, the war in Ukraine, the COVID crisis. Factors that affect the contractors, and therefore the projects themselves, but we can't put the blame solely on them.
What we are doing now is to optimise travel times where possible. We are working with the NRIC on speed increases in places where this is permissible. I think for the summer season, after the delivery of the rolling stock from Germany, we will be able to provide a competitive service to road transport on some lines.