The Minister of transport Petar Mutafchiev:

we’ll look for the best option for railway restructuring

The new Minister of Transport, Petar Mutafchiev, was born in 1961. He has an engineering degree from the Chemical Technology and Metallurgy University. He is well-acquainted with the transport sector. His professional and political careers are directly related to this sector. From 1988 to 1997, he climbed up from a technologist to the post of Director of the Works for braking facilities within BDZ. In 1995, he was elected chairman of the municipal council in Parvomai. Mutafchiev is a member of the Senior Party Council of the Bulgarian Socialist party. He was deputy in the 38th, 39th and 40th National Assembly. Mutafchiev was Vice-Chairman of the Transport and Telecommunications Committee in the 39th National Assembly and member of the local management, regional policy and welfare committee. In August 2005, Mutafchiev was appointed Minister of Transport in the coalition government, headed by Sergei Stanishev.A month after he assumed his position, Petar Mutafchiev presented his team and announced that the major priorities in the work of the transport ministry would be the safety and security of the transport system, its modernisation, the acceleration of projects implemented under EU pre-accession funds, the enhancement of passenger service quality and the improvement of relations with the transport business. The new minister undertakes steps along the heavy road of reforms with the clear objective to ensure perspectives for the sector development. Petar Mutafchiev talked to the Governor of Group Actis Bulgaria and the co-editor of “Zhelezopaten transport” magazine, Tzvetina Rousseva.

Mr Mutafchiev, your career has been related to transport. In the previous National Assembly you were Vice-Chairman of the parliamentary committee for transport and telecommunications. Now, as Minister of Transport of the Republic of Bulgaria, what are your main objectives in this sector?

It is true that, as a deputy and as Vice-Chairman of the Transport and Telecommunications Committee in the 39th National Assembly, I followed closely the developments in this Ministry. In Parliament, I have posed questions and have expressed opinion. By all means, when you know a given sphere, you can quickly comprehend the details and the specifics of the matter. To put it briefly, the problems are the same but the approach to them is different. The task of the Minister and his team is to formulate the best options for solving the problems on the grounds of a clear analysis. Therefore, our major aim in the beginning of the mandate is to prepare and propose working schemes for an all-embracing and long-lasting solution of issues in the transport sphere.

The priorities, which you recently announced when presenting your team, made it pretty clear that you undertake no easy commitments. One of them is the upgrading, modernisation of infrastructure, including that of the railway. Will the State invest in such measures?

It is only natural that the State takes this step; I would even say it is obligatory. Every modern state invests, and all levers of the market economy should be put into operation, so that both foreign and national business is stimulated to get involved in the construction works. In parallel, we make the maximum use of the various forms of concession and privatisation mechanisms with a view to the solution of the heavy infrastructure problems.

Minister Mutafchiev, will BDZ EAD and NRIC be re-consolidated as a holding, consortium or as another entity?

By all means, such a consolidation will not be carried out mechanically in the way their hurried separation was carried out. A profound analysis is necessary. A team of experts will decide the most viable way to consolidate them. There are a number of options. In actual fact, their separation aggravated the problems in the railway sector and produced no positive results. The model proved non-productive. After the separation, apart from funds from the State budget, the infrastructure company had to collect infrastructure charges from BDZ and the other licensed operators. The result thereof is that BDZ owes about BGN50 million to NRIC.

What about the licensed private railway operators, which have been much advertised recently? Don’t they pay any charges?

Among the three licensed private railway carriers, only one actually operates and NRIC mainly depends upon revenue from the State-owned BDZ, which in itself is reflected in the prices.

Will the Ministry of Transport continue to act as regulator of the relations between BDZ EAD and NRIC?

At this stage, yes.

The railways were among the sectors most heavily affected by the natural disasters of this summer. Assessment shows that damages amount to about a quarter of a billion leva. This was one of the first problems you addressed after assuming your new position. What is the current situation?

The damages incurred upon the railway infrastructure are truly enormous. Because of track destruction or dangerously damaged track foundation, BDZ also incurs losses. Of course, there are sections which were repaired and reconstructed. Landslides, though, continue to cause problems. If we do not stabilise the landslides, we encounter the risk of spending in vain the BGN30 million allocated by the Council of Ministers and mainly invested in urgent repair works. In the case of heavy rainfall in the autumn, there would be the imminent danger of repetition of landslides under track sections which have just been reconstructed.

How do you intend to solve the social problems which Bulgarian railwaymen have been facing for a number of years?

The railways are in a difficult financial situation. I have already been provided with a schedule for salary payments. This social problem, though, cannot be solved overnight. It is necessary to elaborate a programme for the financial rehabilitation of the railways, which should guarantee both the disbursement of delayed salary payments in the shortest possible terms, and the social and employment security of the people who work in the sector.

What will be the financial source for salary payments?

Let me give you a particular example. The delayed payments could be disbursed by means of sales of fixed assets, owned by BDZ and NRIC. A very strict control should be exercised so that the revenues from sales are allocated for the remuneration payments, not for ‘patching up’ old financial ‘holes’ or for other needs, as has been the negative practice hitherto.

Your answer was concrete indeed, but again it is a matter of the degree of State commitment to the railways. How do you see the State - railways relations?

I have already mentioned that State investments in railway infrastructure are both viable and necessary. We shall look for the best option for railway restructuring on the basis of a profound professional analysis and clear commitments on the part of the State. In its current condition, the railway infrastructure is not attractive for potential concessionaires. In order to have a stable infrastructure, which guarantees safe operations and allows traffic at the normal European Union speeds, we should start with the first step. This is why the need of a railway transport strategy, which would define the precise role of the State, is so urgent. A number of legislative changes are necessary as well.

Minister Mutafchiev, will our country manage to justify some concrete projects before the large European structural funds, so that it could ensure actual future investments?

The elaboration of infrastructure projects will be accelerated, so that after 2007 we should be ready when our country applies for funding under the EU cohesion funds. Some urgent legislative changes are necessary, as well as improvements in the coordination between the administrations of the relevant ministries, in order to overcome some barriers before the implementation of such projects. At the present moment, some legislative procedures, concerning land acquisition, hinder the progress of the project for electrification of the Plovdiv-Svilengrad railway line as regards the construction of the first section between Krumovo and Parvomai. Internal bureaucracy should be eliminated in order to avoid a situation in the future when Bulgaria could lose the opportunity of using European funds because of similar delays. The modernisation of the transport system cannot take place without a rational utilisation of such pre-accession funds, which for the period 2007-2010 will amount to aproximately EUR 380 million.

You have been the first Minister for a great many years now, your biography is related to the railways and you head the Ministry of Transport. Are there any personal sentiments in your attitude to BDZ and the Bulgarian railwaymen?

Yes, this is mostly the case! By education, I am a metallurgical engineer, but my professional career has involved me with railway matters. I know Bulgarian railway men and I can firmly declare that their professional qualification matches the qualification of their European colleagues. Therefore, they have the utmost right to require from me, from my team and the management of the Ministry of Transport to do all that is necessary for the implementation of such a state policy, which would guarantee the prospects and employment security of their dignified professional occupation

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