Enhancing competitiveness and addressing challenges

The railways in Bulgaria celebrate their 120th anniversary in 2008. Railway history, of course, is more than just a string of events – it contains stories of achievement, stories of challenges, stories of hard times and most of all, stories of people who lived through their work and contributed to the development of railway transport.

Bulgarian State Railways EAD (BDZ EAD) today, as successors of a century-long history, are more than ever obliged to remain true to the traditions of railway excellence and at the same time to respond flexibly and efficiently to the ever-changing conditions of the transport market.

The enhancement of BDZ EAD competitiveness is the topmost strategic objective of the company and its achievement depends upon the ongoing improvement of corporate structure and the implementation of market-oriented management of the balance between customer demand and service offer.

Structural reform

At the end of 2007, BDZ EAD accomplished its structural reform through the establishment of three daughter companies to manage passenger services, cargo services and traction rolling stock. The mother company – BDZ EAD – remained the sole owner of their capital and of the rolling stock. Thus the main business activities, which in 2007 were separated in accounting terms, are now functioning as commercial entities. The objective of the reform was to improve performance through a clearly defined scope of activities and responsibilities, enhanced cost management and discontinuation of cross-subsidising from freight to passenger services. A couple of months ago, the three daughter companies were licensed by the Executive Agency ‘Railway Administration’ as railway carriers, which enables them to perform transport services on their own behalf and at their own expense.

The state only supports passenger services financially, performed under the PSO contract. Naturally, no subsidies are allocated for freight services, which function entirely on market principles. The establishment of two private Bulgarian railway operators for cargo transports in the last few years created conditions for real competition, which is a highly positive factor for BDZ EAD.

Through its daughter-company for cargo services, BDZ EAD conducts innovative marketing in parallel to an ongoing optimisation of process management with regard to customer relations, technical procurement, production management and control, customer satisfaction monitoring (on the basis of assessment and analyses of marketing data), etc. The development of innovative railway services is a key factor for the enhancement of competitiveness and becomes possible through the participation of BDZ EAD in a number of European Union projects, which are implemented either by an initiative of particular railway companies or under European Commission framework programmes. These projects involve representatives of the Community of European railways (CER) and the International Railway Union (UIC), railway industry, consultancy companies, R&D institutes, and so forth.

Important projects

One of the freight service development projects in which BDZ EAD is an active participant, is the ZEUS Project of cooperation of 14 European freight railway companies, which examines the operation of cross-border freight trains. The project was initiated by Railion Deutschland AG with the objective to increase freight transport by rail through quality optimisation, efficiency enhancement and information flow improvement (in particular, as regards the specification of advance information necessary for traction planning).

Another important project is TREND, which is part of the European Commission’s 6th Framework Programme and is a preparatory project which encompasses ‘Integrated Projects’ (IP), dealing with ‘new concepts for Trans-European rail freight services’. The participants in TREND, among which BDZ EAD is one, work upon the development of innovative measures for seamless European rail freight services. A selection of suitable corridors for demonstration in the framework of the envisaged Integrated Projects is among the objectives of TREND and the corridor which concerns Bulgaria is Germany – Czech Republik/Austria – Slovakia – Hungary – Serbia/Romania – Bulgaria – Turkey.

Part of the 6th Framework Programme of the European Commission is the next project with the participation of BDZ EAD – namely, REORIENT. One of the main objectives of REORIENT is to develop a business case for seamless freight operations along the intermodal corridor, connecting the Scandinavian region with Central and South-Eastern Europe. The liberalisation of the European railway market and the ongoing improvements of interoperability will facilitate freight operations in a successful way along this Trans-European corridor.

BDZ EAD participates in one more project under the Sixth Framework Programme of the EC – this is the integrated project CREAM. The main objective of CREAM is to respond to the ever-increasing customer demand for rail-based logistic schemes along the Trans-European mega-corridor from Benelux countries to Greece/Turkey with the relevant extensions of the European network of intermodal terminals. Ultimately, CREAM aims at providing relevant information to the European Commission for the definition of the EU transport and railway policy and the establishment of a common European market for seamless freight services by rail.

Improving transport quality service

Passenger services, on the other hand, are the ‘face of the company’ and their development is crucial for the public perception of BDZ EAD as a railway carrier. The heavy competition between rail and road transport modes prompted the railway carrier to update its customer policy and initiate flexible tariff conditions. The condition of railway infrastructure does not allow significant reduction of journey times, which are one of the main components of the overall service quality. The limited and generally outdated rolling stock for passenger services posed further challenges before the efforts to improve the quality of transport service.

Rolling stock procurement

In spite of financial difficulties, BDZ EAD managed to take particular actions for the renewal of passenger rolling stock. In mid-2007 the railway carrier procured 100 second-hand, renovated passenger coaches from Germany, which were put into regular operation in September 2007 and replaced the compositions of express and fast trains along the main routes. In 2008, the company launched bidding procedures for the procurement of 30 new and 30 recycled sleeping-cars, as well as of five buffet-cars. Furthermore, in the beginning of the year, delivery of 25 new Desiro EMUs took place, which BDZ EAD put into operation in the regions of Sofia and Plovdiv. Thus, the compositions of regional trains were replaced with new electric Desiros, which was the second stage in the renewal of regional trains after the launch of 25 Desiro DMUs in 2005. The investment of BDZ EAD in the two types of Desiros amount to over €184 million.

Each of the new Desiro trains (both diesel and electric) is equipped with a special foldable platform, which facilitates the access of disabled passengers to the train. In accordance with the technical requirements of BDZ EAD, the interior of the new EMUs and DMUs is also designed to cater for the needs of passengers with limited mobility. Furthermore, in July this year, the railway carrier introduced specialised coaches for disabled passengers in two more trains along the route between Plovdiv and Varna. Thus, 14 trains, which include in their composition specialised coaches, operate daily along different routes in the country.

Enhancing safety measures

Along with these achievements with regard to the improvement of service quality, BDZ EAD sustained a tragic accident in 2008, when at the end of February, a fire engulfed a night train from Sofia to Kardam and nine passengers lost their lives. The official investigation into the reasons for the outbreak of the fire in a couchette which spread into the adjacent sleeping-car, still continues but meanwhile the railway carrier has adopted a number of measures to enhance passenger safety.

Smoking in trains, which has hitherto been allowed in certain zones, was immediately prohibited and sanctions were posed to passengers who violate the new requirements and to train personnel who fail to control incidents of smoking in the trains. Training courses for both locomotive and passenger coach crews were organised to enhance the skills of railway personnel to react in crisis situations. This training will be repeated again in the last quarter of the year. Changes in the communication schemes between train personnel, locomotive drivers and dispatchers were introduced with a view to the reduction of crisis response and action times. BDZ EAD launched a new type of service in night trains for passengers who wish to carry a larger quantity of luggage. For luggage which exceeds 30kg, the railway carrier offers the transportation of extra luggage in the postal wagon of the train, whereupon this extra luggage is duly registered and the charge per luggage unit varies between BGN 1.50 and BGN 2.00. Furthermore, BDZ EAD, in cooperation with the national fire-fighting services, elaborated new instructions to the passengers to specify the sequence of actions in case of a fire. Such instructions, as well as fluorescent arrows indicating the exits of each coach, were placed in all passenger zones of the trains.

These are some of the measures which BDZ EAD has implemented in order to enhance control and further improve safety and security levels of passenger services. The need of significant investments on the part of the state in the renewal of rolling stock was again brought up as a major issue. The European regulations and practices show that the governments fund the PSO passenger services through total compensations for the discounts, provided by the railway carriers to certain social groups, and budget subsidies to cover the costs of the railway carrier for the implementation of required volumes of passenger services and the maintenance of the required quality levels.

Conclusion

The main objective of BDZ EAD today is to enhance its competitiveness. The implementation of modern technological solutions, elaboration of flexible operational schemes, introduction of new rolling stock, participation in EU projects and the involvement of highly qualified personnel, are among the most important steps towards the provision of high-quality service to customers.