Russia's Northwest Development Fund to bid for freight unit of Bulgarian Railways - paper
MOSCOW. July 13 (Interfax) - St. Petersburg's State Fund for Development of the Northwest (GFRSZ) has filed an application to bid in the privatization tender for the freight services division of Bulgarian State Railways (BDZ), BDZ Cargo, national daily Kommersant reported on Friday.
GFRSZ has notified the Bulgarian Privatization Agency about its intention to bid in the privatization of the company, agency director Emil Karanikolov told local media. Kommersant, citing a letter that the fund sent to Karanikolov on May 19, that an "investment entity in Bulgaria will be authorized or created, as well as financed," in order to bid in the tender. This information was confirmed by the agency, the fund and Holding BDZ.
The valuation of BDZ Cargo is supposed to be completed by August 10 and the privatization is scheduled for October.
The company is the only Bulgarian railway freight company, but companies from other countries operate on Bulgaria's railway network. BDZ Cargo carried 7 million tonnes of freight in 2014. The company has five locomotive and seven freight car depots, as well as land, buildings and installations, 4,800 railcars and 150 locomotives.
The Bulgarian authorities tried to sell BDZ Cargo in 2012-2013, initially for 100 million euros, then for 50 million euros. Potential buyers that were mentioned included Austria's Donau-Finanz Transport Beteiligung GmbH, Romania's Grup Feroviar Roman (GFR) and Deutsche Bahn subsidiary Shenker.
GFRSZ head Sergei Afanasyev told Kommersant that the goal of the bid is "not economic, but political," remarking that after the cancellation of the project to build the South Stream gas pipeline through Bulgaria, Russia has not had joint projects with this country.
"We have linked the privatization to the prospect of multifaceted expert cooperation on a number of mutually beneficial projects between countries in Southern Europe and regions of Russia, including the Northwest," Afanasyev said. He said the fund is the only bidder from Russia for the railway asset, but it does not have money, and the bid is only an attempt to "not lose the initiative" on participation. It does not have financial parameters.
The fund intends to offer participation in the project to Russian Railways (RZD) and a number of other major Russian companies by the middle of September, Afanasyev said.
RZD declined to comment.