Bulgaria delays rail sell-off until after election

Reuters News
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Posted: Apr 26, 2013 9:26 AM

SOFIA (Reuters) - Bulgaria pushed back the privatization of the state railway company's cargo unit until after May's parliamentary elections, highlighting the difficulty of enacting economic reforms amid political instability.

The operator BDZ hopes to eventually raise about raise around 100 million levs ($67 million) from the sale to ease its 700 million levs debts and allowing it to tap a World Bank loan.

But Bulgaria has already twice extended the deadline for the disposal, in part due to mounting public pressure to halt the deal. Opponents of the sale claim it will not be conducted transparently and will lead to mass layoffs.

Dublin-based creditor Depfa Bank has also won a court order freezing the cargo unit's assets, putting a further block on the sale.

Bulgarians go to the polls on May 12 in an early election after mass protests against widespread corruption and low living standards toppled Boiko Borisov's center-right government in February.

Monday's deadline for offers has now been moved to June 10 after requests from prospective bidders, the privatization agency said in a statement.

The transport ministry is also holding talks with BDZ creditors to reach an agreement on debts so the freeze can be lifted. ($1 = 1.5037 Bulgarian levs)

(Reporting by Angel Krasimirov; Editing by Toby Chopra)