Rail freight companies on the verge of bankruptcy

High electricity prices put many rail freight operating companies at risk of bankruptcy. Therefore, the sector insists on various measures, but so far they have managed to agree with the ministry only 50% reduction of infrastructure charges.

Uncertainty over electricity prices is delaying the conclusion of annual contracts between railway companies and their customers.

"The companies sign annual contracts in December, they are not signed now, because no one knows whether it will be a profit or a loss," said Martin Yanev of the Green Transport Cluster.

For the time being, the Ministry of Transport is open for discussions and is looking for a solution.

"There are difficulties in concluding contracts with customers, but the reason is the high price of electricity. There are no other reasons than these. But we believe that with the contracts themselves they could regulate the relationship with their customers so as not to work at a loss," explained Iliya Iliev, Deputy Minister of Transport.

The Deputy Minister explained that the state cannot interfere in trade relations and reminded that the railway sector is fully liberalised. However, the main customers are suppliers of goods in large amounts, which have relatively little added value.

And this does not allow the costs to be passed on to the end user. Thus, the transportation of raw materials such as metals, cement, fertilizers and other bulk cargo can be a challenge.

"Therefore, it is possible for some large manufacturers to stop or shrink volumes a lot and break the supply chain. This will lead to an avalanche of price increases, as it will shrink many productions. Working solutions have been found, so there is no reason to stop There is an absolute equality between the carriers, so I do not expect any cataclysms in this direction," said Dr. Ivan Petkov from VTU" Todor Kableshkov ".

Infrastructure fees are expected to be reduced by the end of the month.

"We will propose to the Ministry of Finance to include in the budget funds to compensate for infrastructure charges by up to 50% reduction. I think this will very well alleviate the cost of carriers. It will not be at the expense of the National Railway Infrastructure Company," explained Deputy Minister Iliev.

However, the Ministry of Transport has yet to deal with the years-long problems in railway transport. Even reduced by 50%, fees will not revive rail transport - it will again be twice as expensive as road transport.