Financial position of Maritsa East Mines is deteriorating

The financial position of the state-owned Maritsa East Mines is deteriorating. The state will pay workers' salaries until next summer, when trade unions expect a plan to tackle the crisis at the company to be adopted.

Yesterday, October 17, Bulgarian Energy Holding (BEH) transferred BGN 16 million to the company for September wages and in November a further BGN 28 million is to be transferred for October wages. During the summer, BGN 56 million have already been provided. Thus, this year the company will receive BGN 100 million as a loan from Bulgarian Energy Holding for workers' salaries. Another hundred million will be paid next year.

The output of the state-owned mines for the first six months of the year has decreased by more than 50%.

"The mines can't make ends meet, it's visible. The money you are talking about, loans from the bank and loans from BEH, will be quite useful to get us through to the spring and summer," explained Alexander Zagorov, "Podkrepa" trade union.

However, it is not clear whether the company will repay the loan to BEH, which also bought part of the debts of the capital's district heating company from Bulgargaz.

"The bad thing is that these loans are very often forgiven and turn into a cross-subsidisation of these companies. A very harmful mechanism, a very harmful principle that violates market rules," said Dr. Ivan Hinovski, chairman of Bulgarian Energy and Mining Forum (BEMF).

However, the trade unions hope that despite the difficult situation, the mines will have a chance for survival with other production.

"They are very late, to say the least. Things have been postponed in time to some critical point. The population has already got used to the fact that there is nothing going on there, we have started to write off Maritsa-East as a possible electricity producer. Not at all. 'Maritsa East' will have its renaissance, coal will be a small part of it," said Alexander Zagorov.

However, the lack of a comprehensive energy policy remains a problem.

According to the mines' financial report, the company continues to accumulate serious losses. By the end of June, the accumulated loss was over 213 million BGN. Separately, the company has not paid its concession fee to the state for the use of minerals. The situation is further aggravated by the delayed renegotiation of the Reconstruction and Resilience Plan, thus our country may lose BGN 1 billion for the reclamation of the mine sites. This money must now be paid from the state budget.

"If you ask me, this is the biggest crime in the energy sector today. Nobody in the country has the courage, we are going from election campaign to election campaign and none of the politicians dare to say, 'Ladies and gentlemen, we are going to implement the gradual liquidation policy,'" Ivan Chinovsky said.

BNT asked the Ministry of Energy to comment on the situation of the other energy companies and Bulgarian Energy Holding. They refused to answer the questions.

"It will be very interesting what will happen when the "rich" companies Bulgartransgaz and ESO (the electricity and gas operator), which are the main “blood donors” of Bulgarian Energy Holding, are removed from BEH. What will happen to the holding (BEH) and to this policy of helping companies in trouble", asks Ivan Chinovski.

The removal of the electricity and gas operator ESO and Bulgartransgaz from the BEH structure is included in the latest amendments to the Recovery and Resilience Plan, which have not yet been adopted by the National Assembly.