World Bank to allocate up to BGN 600 mln to Bulgarian railways
The loan will be released against specific commitments for reforms in the sector
Bulgaria will get a loan of up to BGN 600 mln to support reforms in the country’s railway sector under a Memorandum of Understanding with the World Bank (WB), approved by the Government yesterday. The document is a continuation of the Memorandum of Understanding to facilitate cooperation in the development of infrastructure in Bulgaria, signed in the summer by PM Boyko Borissov and WB President Robert Zoellick.
The document itself does not specify the exact amount of the loan and only outlines the priorities for reforms and support. The Government has undertaken a commitment to maintain a financially stable railway sector that meets European requirements while maintaining strict fiscal discipline.
The exact amount will be specified in the coming months. From the negotiations held so far it became known that the Bulgarian State Railways (BDZ) would get up to BGN 460 mln and the National Railway Infrastructure Company (NRIC) – BGN 140 mln. Finance Minister Simeon Djankov explained yesterday that a loan would be extended to the State and it would then allocate the money to the two companies. First, however, a permission from the European Commission should be obtained because this financing will be, in fact, State aid.
The two companies will be able to dispose of the funds only after a loan agreement is signed with the World Bank, which is not likely to happen before May 2011.
"'The document obliges the Government to maintain a financially stable railway sector, observing strict fiscal discipline," said Transport Minister, Aleksandar Tsvetkov.
Text and photo: klassa.bg
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(16.12.2010)