Track Access Charges for the Bulgarian Railways – Technical Assistance Market demand

Transport demand, period 2000 – 2013  Passenger demand dropped down by almost 5% average per year  Freight demand decreased by 3% a year Workshop 17/12/2014 Railway sector in Bulgaria: Current situation and challenges

External factors influencing passenger demand  Number of population: decreasing by 0.7% per year  Population age: 18.5% over 65 years, 13.2 % below 15 year  Territorial distribution: 64% in South Bulgaria; 49.5% in South central and South-western region  Level of incomes: 48% of EU average  Level of car ownership: 76% of EU average Seminar 21/01/2015 Railway infrastructure – Key to achieve sustainable transport

External factors influencing freight demand  Structure of the national economy: 63.4% of GVA from services, 31.3% from industry  Collapse of big clients (Kremikovtsi)  SME generate over 59% of the GVA  Shift from large volumes of low- price bulk materials to smaller- volume high-value general cargoes  60% of international trade is to/from countries served by sea and IWW Seminar 21/01/2015 Railway infrastructure – Key to achieve sustainable transport

Result for nowadays demand by rail  20% of the lines serve 80% of the demand Workshop 17/12/2014 Railway sector in Bulgaria: Current situation and challenges

Future perspectives for passenger demand  Negative demographic trends will persist  Incomes and car ownership are will keep growing  Value of time will grow in parallel to GDP pc  Target group for socially oriented services will shrink  Higher demand for suburban services  Lower demand for long distance services and regional services  Forecasted growth in number of passengers:  2020: 3.7% compared to 2013  2030: 9.2% compared to 2013 Workshop 17/12/2014 Railway sector in Bulgaria: Current situation and challenges

Passenger demand and supply 2030/2013 Workshop 17/12/2014 Railway sector in Bulgaria: Current situation and challenges Assumed new services:  Plovdiv – Panagyurishte  Plovdiv – Hisarya  Plovdiv – Karlovo  Stara Zagora – Chirpan  Stara Zagora – Nova Zagora  Pleven – Cherkvitsa route  Mezdra – Montana Assumed additional supply in train-km: 8-9%

Future perspectives for freight demand  Domestic demand:  Agriculture will keep decreasing  Services are expected to grow  Industry share anticipated to remain stable: highest growth is expected for ferrous and non-ferrous metal industries, followed by engineering, and chemical industries  Overall 20% growth 2030/2013  Good news: better perspectives for 2030 international demand exist:  30% overall growth of demand  60% more import and export  65% more transit  However, alternative routes and transport modes will compete for this demand! Workshop 17/12/2014 Railway sector in Bulgaria: Current situation and challenges

Freight demand and supply Workshop 17/12/2014 Railway sector in Bulgaria: Current situation and challenges Estimated additional supply: 22% more train-km in 2020 in comparison to % more train-km in 2030 in comparison to 2013

Conclusions Workshop 17/12/2014 Railway sector in Bulgaria: Current situation and challenges