Bulgaria's Rail Modernization Faces Setback as Major Company Cancels 1 Billion Leva Deals

Bulgaria is on the brink of losing nearly all the funds allocated under the Recovery and Sustainability Plan (RSP) for railway modernization, as Bulgaria State Railways (BDZ) continues to operate with outdated locomotives and passenger cars, reports OFFNews. Two significant contracts for new trains, for which a contractor had already been selected, are now facing failure.

Stadler Polska, the leading manufacturer awarded contracts for seven double-decker locomotives and thirty-five regional locomotives, has decided to withdraw, OFFNews reports. This decision was made two weeks ago.

The contracts in question involve substantial sums: the contract for the seven double-decker trains is valued at over 300.5 million leva, while the contract for the thirty-five regional locomotives is worth 642.5 million leva, bringing the total to 1 billion leva or half a billion euros.

Railway specialists consulted by OFFNews anticipated Stadler's decision due to the unreasonable conditions imposed by Transport Minister Georgi Gvozdeikov. The contract stipulated a 100 percent penalty if not fulfilled by mid-2026, a condition that banks would find too risky to finance. This stringent requirement likely contributed to Stadler's decision, compounded by political uncertainties and the risk of shifting officials.

Theoretically, a contract could be awarded to PESA, the second-ranked candidate for the regional electric locomotives. However, PESA's offer exceeds 800 million leva without VAT, significantly more than Stadler's bid.

Additionally, other procedures for new trains are facing difficulties. The public procurement processes for new electric pantograph shunting locomotives and long-distance push-pull trains have not yet been initiated.