Under a succession of reform-mindedgovernments, the Bulgarian rail sector has achieved someambitious targets-stable traffic volumes and hard-wonfinancial stability that was endorsed by investor confidenceduring a recent bond issuance for EUR 120 million. Today,all Acquis Communautaires relevant to the rail sector havebeen adopted. Vertical unbundling of services separatedpublic railway infrastructure from operation of railwaytransport services; the track access charges that wereintroduced opened market access to rail infrastructure andallowed cost recovery; and public service contracts werelaid out to clarify government contributions to the sector.In addition, Bulgaria's substantial accomplishments inimproving railway operating efficiency included reducing theState-owned railway company staff by 40 percent; creating aholding company structure with three legally independentsubsidiaries and business lines-freight, passengers, andtraction services. The various roles of the State inBulgaria's rail industry- policymaker, regulator,owner, and client require a cultural change if Government isto optimize the balance among public policy choices, entitymanagement constraints, and available fiscal space.Overcoming the railway industry's challenges will bedifficult and should not be underestimated; the currentfinancial crisis will appear to militate against immediateaction in an investment-intensive sector such asinfrastructure, but the railway industry in Bulgaria hasnever been better positioned to move forward. Postponing thecompletion phase of railway reform will not only squanderfuture economic prospects through continued assetdeterioration and loss of market share, but also lay wasteto the past investments that have brought the country so faralong in attaining today's railway market position andfinancial stability.
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