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Railroad operation certificate in Bulgaria

Transportation of passengers and goods by railway

The transportation of passengers and goods by railway is regulated by the Convention concerning International Carriage by Rail(COTIF) from 9 May 1980, Regulation (ЕО) № 1371/2Transportation of passengers and goods by railway007 REGULATION no. 41 of 27 JUNE 2001 and REGULATION № 54 from 2 June 2003 accordingly. The domestic regulation of transportation services can be found in the Railway Transport Act.
In Bulgaria Railway transport activities are coordinated and controlled by Executive Agency Railway Administration (EARA). The railway infrastructure elements and the land on which these elements are built is public property of the state. Those elements can be used by the National Railway Infrastructure Company (NRIC) or by traders to whom a concession has been granted.

Licensed railway transport operators

Railway infrastructure can be used only by licensed railway transport operators to whom a safety certificate has been granted. The relations between infrastructure operators and transport operators in respect of the access and use of railway infrastructure are regulated by a contract. The contract shall be concluded within six months after the date of the licence is granted to the transport operator. In case the licence is withdrawn or its term has expired, the contract is terminated. The transport operator may sign a new contract with the railway infrastructure operator within six months after the date of termination of the original contract.

In order to gain access to and use railway infrastructure, transport operators pay charges levied by the railway operator.

Licensed Transport Operator

Licences for transportation of passengers and goods by railway are issued by the Minister of Transport, Information Technology and Communication to an already licensed railway transport operator. The licence is individual and can’t be transferred to another transport operator. The license is granted for an indefinite period of time, but is reviewed every five years. It is also reviewed in the case of restructuring the entity to which the licence has been granted or as a result of a change in the ownership of that entity. The license is considered valid until the end of the review procedure.
Should it be established that the transport operator does not fulfil the requirements for granting a licence during the process of licence reviewing, the Minister of Transport, Information Technology and Communication shall issue mandatory guidelines and define a timeframe for correction of irregularities. In case of failure to fulfil the mandatory guidelines within the stipulated timeframe, the license shall be terminated.

The act determines two types of licences:

  1. Licences for transportation of passengers;
  2. Licences for transportation of goods;

Licence for transportation of passengers and goods by railway is granted to an applicant with good reputation, satisfies the requirements for financial stability, satisfies the requirements for professional competence and is willing to conclude insurance contracts that cover the applicant’s liability in respect of passengers, luggage, cargoes, mail and third parties in accordance with the provisions defined by law. The applicant must also satisfy the following requirements:

  1. To operate as an undertaking whose main business is the rail transport of passengers and/or goods in or outside the territory of the Republic of Bulgaria;
  2. To possess the required equipment and facilities necessary for the purpose of providing rail transport services;
  3. To operate engine car traction units, including an engine car and an electric multiple unit (EMU) and to employ staff members with the necessary qualifications to drive and operate those units.

The conditions for termination of the license are described in the Railway Transport Act. It can be terminated with a decision of the licensing body, upon an application of the license holder or in case the license holder decides to terminate company’s activity.

Rail transport operator with a licence issued by another country

Rail transport operators with a licence to perform rail transport services, issued by a country Member of the European Union may also perform these services on the territory of the Republic of Bulgaria and  have access to the railway infrastructure.
Access to the railway infrastructure for the purpose of providing rail transport services can also be granted to transport operators licensed by foreign railway administrations, but solely when those services are described in the International agreement signed by the Republic of Bulgaria.

The companies operating under a railway transport licence in Bulgaria are less than a dozen.   Most of these companies are state-owned or the state is a shareholder in them. Only two of the companies have a Transport licence issued by the Ministry of transport, Information Technology and Communication. Most of them work under licences issued by another country Member of the European Union. The only company that is licensed for transportation of passengers is “Bulgarian State Railway – Passengers Transportation” LTD.

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Airports and airfields establishment

Аirports and airfields on the territory of Bulgaria can operate only if they have a certificate for operational worthiness. The Directorate General “Civil Aviation Administration” issues a certificate of operational worthiness of an airport when the following requirements are met:

  1. The technical specifications of the airfield and the facilities, the limitation of obstacles, equipments, visual air navigational systems, airport services and technical infrastructure needs to comply with the secondary Bulgarian geodetic legislation requirements;

  2. Meteorological information systems need to comply with the secondary legislation requirements of Bulgaria;

  3. Flight information services need to comply with Bulgarian legislation;

  4. Emergency, rescue and firefighting services need to comply with the secondary legislation requirements of Bulgaria.

Directorate General “Civil Aviation Administration” issues a certificate of operational worthiness of an airport when the following requirements are met:

  1. the technical specifications of the airfield and the facilities, the limitation of obstacles, equipment, visual air navigation systems, airport services and technical infrastructure need to comply with the secondary legislation requirements of Bulgaria;

  2. Directorate General approves a survey of the pertaining territory, including air access in scale 1:5000 or 1:25000 with marked access to the airfield with other types of transport from the neighbouring populated areas, and a geodetic photography in scale 1:1000 of the airfield, the buildings, the facilities and the underground infrastructure;

  3. the owner or the lessee of the airfield needs to have submitted the airfield project for coordination at Directorate General.

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If your company is subject to compulsory liquidation

  • 31.01.2012
    • , by 
  • by Milen Hristov
  •   5 Comments

The deadline for re-registration has passed. Now all companies that have failed to meet the deadline will be liquidated. Most Britons have registered companies as holdings of their property in Bulgaria. the compulsory liquidation will put their properties on tender and will sell them before the company is closed. So what they can do?

Make sure you have someone to check your company file on a regular basis. This way you can find who is appointed by the Commercial register as a company liquidator. Once you know his details, you can contact him and discuss with him the options to transfer the property to the company owner without actually putting it on tender. This is one of the options the Commercial Act gives to the company owners i.e. instead of cashing the company assets, the liquidator can distribute the assets to the shareholders after he has paid the liquidation expenses, taxes and liquidator’s remuneration. you need to be persistent on this, since not every liquidator will agree to do it. Therefore it is advised that you hire a solicitor to negotiate on your behalf.

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Another case related to Bulgarian Dreams is won by MH Legal

We are pleased to announce that MH Legal has won a milestone case on behalf of our clients against Museum House Ltd., the developer of Museum House residential building, Sofia. The apartments in that building were sold through Bulgarian Dreams. The former owner of  Museum House Ltd. was Maria Georgieva,  also a co-founder of Bulgarian Dreams. Our clients have been awarded with about EUR 14,500 by the court.

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Echo of the Bulgarian property crisis

Yesterday I found an article in the Independent newspaper talking about how Irish are blaming the property journalists for misleading the investors for investment locations like Bulgaria. Indeed, I’m sure that there were a lot of paid publications (Articles) which presented Bulgarian properties as quick and easy investment return. However I hink most of the negative influence was made by the UK and Irish estate agents. Pursuing quick middle-man fees, they have convinced thousands of  investors to put their money into something that was not quite right. On the other hand, very few investors, have made the mandatory due diligence of what they actually buy.

In my practice I see a lot of Irish and British property investors mislead by their UK/Irish estate agents. The investors we let to think that the investment return will be within couple of years, which is not right. But how come all that property investors made the same mistake again? Have they forgotten the Span property rush? This is a question each investor need to ask themselves. Also, most of the developers who lied to the investors are actually British and Irish. I’m sure that they left Span to do the same thing in Bulgaria, and mislead the same investors again.

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The mass liquidation of companies in Bulgaria

The mid year passed and the deadline for re-registration all Bulgarian companies is fast approaching. January 2011 will become nightmare for company owners who haven’t reregistered. Their companies will be forced into liquidation by the court and the all company assets will be sold on public tenders. Moreover, the court will appoint a liquidator and the company owner will have to pay their monthly salary. IF the company assets are not enough, the company owners will be liable for both company debts and for liquidator’s salary.

Therefore we strongly urge all foreigners who still haven’t reregistered their company to do it as early as possible.

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The “trap” of the preliminary agreement

  • 07.12.2009
    • , by 
  • by Milen Hristov
  •   2 Comments

If you read this you have probably had experience with signing a preliminary agreement with Bulgarian developer. This agreement usually binds the developer with the obligation to finish the property and provide you with the title deed by certain deadline. Well, this seems too good to be true.

The preliminary agreement is regulated in only 1 article in the Agreements and Obligations Act and nowhere else:

19. (1) A preliminary contract preceding the conclusion of a final contract for which a notarial deed or notarial certification is required shall be concluded in writing.

(2) A preliminary contract shall contain provisions concerning the material terms of the final contract.

(3) Either party to a preliminary contract may bring an action for conclusion of the final contract. In this case the contract shall be deemed concluded as of the moment of entry into force of the ruling of the court.

In short, this is just written promise that the final agreement will be signed (i.e. title deed). Of course, the preliminary agreement for construction of property is more complicated than just ordinary preliminary agreement. The preliminary construction agreement consists of two basic contracts:

  • the ordinary preliminary agreement as per Art.19 of the Agreements and obligations act and
  • agreement of manufacture . It is also regulated in the Agreements and Obligations Act (you can read the regulation of this type of contract below)

VIII. A CONTRACT OF MANUFACTURE

258. Under the contract of manufacture the contractor shall be liable at his own risk to manufacture something in accordance with the other party’s order, and the latter — to pay a compensation.

259. Unless otherwise agreed the contractor shall manufacture what is ordered with means of his own.

260. The contractor must immediately inform the other party if the provided designs or supplied materials are unfit for the correct performance of the work, and ask for the necessary changes in the designs or for the supply of appropriate materials. If the other party fails to do so the contractor may renounce the contract.

If the contractor fails to provide the above warning, he shall be liable before the other party for the damages caused.

261. The contractor must perform the work in such a manner that it becomes fit for the usual or stipulated in the contract purpose.

The contractor who is performing the work with his own materials is responsible for good quality.

Where several persons have assumed the obligation to perform together certain work, they shall be liable jointly and severally, unless otherwise agreed.

262. The person ordering the work may check the performance of the contract at any time, provided he does not disturb the contractor.

(Amended, SG No. 12/1993). If it becomes evident that the contractor will not be able to perform the work on time or that he will not perform it in the way agreed upon or as due, the person ordering the work may avoid the contract and claim damages under the general rules.

263. The risk of chance loss or damage of the materials shall be borne by the party providing them, if the other party is not in default.

264. The person ordering the work must accept delivery of the work done in accordance with the contract.

Upon accepting delivery he shall examine the work and shall state all the objections for improper performance, except for such defects which cannot be revealed through the usual manner of acceptance of delivery or for such which are revealed only later. The person ordering the work shall inform the contractor of such defects immediately after they are discovered. This shall not be necessary when the contractor was aware of them.

If no such objections are raised, the work shall be deemed accepted.

265. If during the performance of the work the contractor has deviated from the order or if the work done has deficiencies, the person ordering the work may claim:

repair of the work within a stipulated by him period without payment;

covering of the expenses needed for the repair or a respective reduction of the compensation.

If the deviation from the order or the deficiencies are so material that the work is deemed unfit for its contractual or ordinary purpose the person ordering the work may avoid the contract.

These rights shall be extinguished by limitation within six months, and in case of construction work — within five years.

266. The person ordering the work shall pay compensation for the accepted work. If the compensation is agreed upon on a unit price basis, its amount shall be determined upon acceptance of the work.

If in the course of the performance of the contract the duly determined prices of materials or labour change, the compensation shall be adjusted accordingly, even where it was agreed upon as a total sum.

(Paragraph 3, repealed, SG No. 12/1993).

267. If the performance of the work becomes impossible due to a reason neither party is liable for, the contractor has no right to compensation. If one part of the work was done and may be of use to the person ordering the work, the contractor is entitled to a respective part of the agreed compensation.

The contractor shall be entitled to compensation if the performance of the work has become entirely or partially impossible due to the unfitness of the materials or designs provided by the person ordering the work, and the contractor has duly notified him.

268. If there are reasonable grounds the person ordering the work may renounce the contract, regardless of the fact that the performance has begun, by paying the contractor for the costs incurred, the work done and the profit which he would have obtained from the performance of the work.

(Paragraph 2, repealed, SG No. 12/1993).

269. If the contractor dies or becomes unable to proceed with the work the contract shall be terminated, unless it was concluded with regard to the person of the contractor and his heirs agree to proceed with the work.

Upon the termination of the contract the person ordering the work shall pay for the work done and for the usefully invested materials in accordance with the contracted compensation.

So now you see that the essence of the preliminary agreement for buying offplan property is very complex. I will interpret the nature of the offplan property purchase agreement at a later stage.

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