Breakdowns, a lack of predictability and growing discontent among citizens – this is the situation facing „Toplofikatsia – Sofia“ as winter approaches. What are the company’s problems – are they the result of years of poor management, insufficient investment and a lack of a clear strategy for its recovery… What are the financial losses, the debts to state-owned companies and the possible models for the future management of the heating company… Here is what Simeon Stavrev, municipal councillor from PP-DB, told Lily Marinkova in the FAKTI studio and the „Conversation“ programme.
— Mr Stavrev, „Toplofikatsia – Sofia“ is a chronic problem for the capital. However, the situation now appears particularly worrying as winter approaches and numerous breakdowns occur. Who is responsible for this state of affairs?
— At present, responsibility lies with the current management of „Toplofikatsia – Sofia“ and the parties that appointed it – GERB, BSP, „There Is Such a People“ and breakaway members of Vazrazhdane. If we are to identify those responsible specifically, they are these political forces.
— The management was appointed on an interim basis. What is your conclusion from this?
— Yes, it was appointed temporarily, but it has already been running the company for two years without any transparency. It was appointed by the parties I listed, and they bear political responsibility. It is elementary – when you appoint the management of a commercial company, you must take responsibility for its work.
— Many citizens were also present at the meeting of the engineering committee of the Sofia Municipal Council, at which the management of „Toplofikatsia – Sofia“ was supposed to explain the causes of the breakdowns and the state of the company. Tensions were high. Is there a danger that they will escalate as the cold days arrive?
— There were many municipal councillors, but also quite a few citizens who were shouting and heckling. And rightly so, because people are extremely irritated. The situation is like a ticking time bomb. Tensions will rise and could turn into a very strong public revolt, especially as the cold days approach. People are mainly angered by the lack of predictability. At the meeting, they said that the deadline for repairing one breakdown had been changed five times. The management of „Toplofikatsia“ stated several times that it could not commit to a specific deadline because it might fail to meet it. This is completely absurd.
— How many breakdowns are there and where are the problems concentrated?
— I brought a map showing the current problems. As of yesterday, there were at least 112 breakdowns. They are mainly in the eastern part of the city, but their number is extremely high and the situation is truly frustrating. Citizens shared many stories. On the one hand, repairs were not carried out during the summer but are now being conducted during the heating season. On the other hand, I hear that in about a week this same management will be appointed permanently by the same political groups in the Municipal Council. I do not think there is a reasonable person who, given the company’s current state, would appoint the same people again. Yesterday, citizens quite reasonably asked: „Are you out of your minds to appoint these people again when the situation is like this?“.
— Apart from the breakdowns and repair deadlines, what other problems did you raise with the management?
— There were many questions, a large part of which were repeated – when the repairs would be completed. The more serious problem, however, concerns the data, some of which I presented at the meeting. First, 286 substations had been without heating for more than two months. That is a huge number. Last year there were problems in „Mladost“ and „Druzhba“. Around BGN 60 million was then invested in repairing the pipes in „Druzhba“, precisely to improve the situation at Sofia East CHP, which serves „Mladost“, „Druzhba“ and „Studentski Grad“. I asked the management why the heating in „Studentski Grad“ had been stopped a few days earlier and then turned on again. It is claimed that there had been technical problems, but despite this they decided to restore the supply of heat. At the same time, there are many breakdowns in the area. We received no answer as to why the heating had been stopped and why it had been turned on again within a week. Of course, there should be heating there, but citizens have the right to know the reason for these actions.
— What do the data show about investment in the company?
— In the 2025 business plan, the investment programme is 60% complete. This means that only 60% of the funds planned for repairs have been invested. I asked why all the planned money had not been spent so that the number of breakdowns could be reduced. Breakdowns can always occur, especially when the network is in such a condition, but as much money as possible should have been invested in the spring and summer to avoid the current situation. Official data show that losses in the network amount to 24.7%. In other words, almost a quarter of the energy entering it is lost. That is a huge percentage. The management gave no explanation and presented no clear plan for how it intends to reduce these losses. In practice, we burn gas to heat ourselves, but around 25% of it is lost because of the condition of the pipes.
— You also pointed to a serious increase in the company’s financial losses. What are the specific figures?
— I asked them what the losses had been in recent years. In 2023, they amounted to BGN 88 million. In 2024, after the current management had already taken over, losses reached BGN 143 million – an increase of around 60% compared with the previous year. In 2025, losses amount to BGN 426 million. I cannot explain how the figure rose from BGN 88 million in the year before this management took over to BGN 426 million. The interim managers themselves were also unable to explain it. At present, the company’s debts to the two state-owned companies – Bulgargaz and the Bulgarian Energy Holding – exceed EUR 1.3 billion. This is completely absurd. I do not know how „Toplofikatsia – Sofia“ has literally not gone bankrupt. The management said it was making plans for next year. However, I am not convinced that the same people will be there then. The state can decide at any time to initiate insolvency proceedings, appoint a trustee and select new management to propose a recovery plan.
— What are the possible solutions? Various options for the company’s ownership and management are being discussed publicly...
— This cannot continue. Not least because the state is effectively turning into a payday lender for „Toplofikatsia“. When you take out a mortgage or consumer loan, the interest rate is not 12 or 16%. Those are precisely the rates the company pays on its debts to the two state-owned companies. This is also absurd. In my opinion, there are four possible paths. The first is for the company to remain municipal. However, the municipality does not have enough funds to invest the necessary money and restore it to health. Moreover, it is effectively controlled not by the mayor but by the Municipal Council. Therefore, I do not believe that maintaining the current model is a viable option.
The second option is for the company to be transferred to the state and for the state to try to restore it. This has already happened – „Toplofikatsia“ has moved from the municipality to the state and back. The result is accumulated debts that are ultimately written off. However, the state has not managed it in the best possible way either. I see little logic in it becoming state-owned again.
The third option is for the company to be sold. In my opinion, almost no one wants it to be fully privatised, because there would then be insufficient control over the new owner. The heating companies in Plovdiv and Varna have been sold, but the scale there is considerably smaller. Sofia’s heating company serves more than 450,000 customers, and I do not think it would be sensible for it to be sold outright.
The fourth option remains – a concession. An example of such a model is „Sofiyska voda“. Since the company was granted a concession, there have been no protests over a lack of water. Of course, the price has risen significantly, but it is determined by KEVR, not by the company itself.
— The management of „Toplofikatsia“ claims that it is in a regulatory trap because the end-user price is determined by KEVR. Does this mean that the company should seek solutions mainly in its costs?
— Exactly. They say that the end-user price has been set and they cannot change it. In other words, revenues are clear. The company has around 450,000–460,000 subscribers, knows the price and knows consumption. Therefore, it must find ways to reduce its costs. They did not deny the information I cited either – that they had submitted a proposal to increase salaries by 16%. Fine, but if costs and staff are not optimised, how will improvement be achieved? This brings us back to the losses of BGN 426 million for 2025. There is also a report by the mayor that was not considered throughout the summer. Its purpose is to analyse the state of „Toplofikatsia“ and identify the most reasonable option for its recovery. A great deal of money is needed for this – to repair the network and the heating plants so that as little gas as possible is used or another alternative fuel is adopted. For some reason, this report did not reach the Municipal Council for months. As I understand it, it is due to be considered next week. If approved, the World Bank will be able to prepare an analysis and propose various scenarios, as well as financing options. The situation is already so serious that action must be taken, rather than simply standing by and watching hundreds of breakdowns without anyone being able to say when they will be repaired.
— At the meeting, the opinion was also expressed that the company was deliberately being brought close to bankruptcy in order to pave the way for privatisation or a concession. Do you have grounds to believe this is the case?
— I cannot say whether that is actually the case. Only the management knows what is happening inside the company. I do not have information that would allow me to draw such a conclusion. It is possible that the company is simply deteriorating naturally because of the way it is being managed.
— You also mentioned the possibilities for modernisation and the use of new energy technologies. What could „Toplofikatsia – Sofia“ do in this direction?
— It is strange that the management is not responding to the trends. At present, a great deal of electricity is being stored in private batteries in Bulgaria. During the day, photovoltaic plants, thermal power plants and the nuclear power plant produce more electricity than we consume. A great deal of electricity is also produced in Greece that is not needed at certain hours. The fact that so much electricity-storage capacity has been built in Bulgaria is crucial. Surplus energy from photovoltaic plants can be stored in batteries. Sometimes the Greeks literally sell us electricity so that we can store it, and in the evening we sell it back to them at a considerably higher price. „Toplofikatsia – Sofia“ has done nothing in this direction. The company could have bought batteries, stored the electricity it generates during the day and sold it in the evening. The price the previous evening was extremely high – I think it reached EUR 429. This is an example of an opportunity through which the company could have secured additional financial resources. The interim management has been there for two years already, but has taken no action on this issue. I asked them at the meeting as well, but received no answer. Serious investment and a complete reconsideration of the company’s operations are needed. It must be assessed whether it is necessary to burn so much gas, whether alternative energy sources can be used and how the energy produced can be stored. The company must be modernised so that maximum results can be achieved with minimum investment. The aim is, on the one hand, for the price to consumers to remain as determined by KEVR and, on the other, for losses to be minimised. We cannot continue reaching a situation with more than 100 breakdowns in the eastern part of Sofia alone.
— What will your next steps be? Will the PP-DB group support Mayor Vasil Terziev’s report, which is intended to launch the analysis of the company’s future?
— I think PP-DB will support the report. It is a report by the mayor intended to provide an initial analysis and seek financing, probably amounting to hundreds of millions of euros. We cannot fail to support it, because we have always stated that the company must be restored. We do not control „Toplofikatsia“. As I already said, the management was appointed by GERB, BSP, „There Is Such a People“ and breakaway members of Vazrazhdane.
— Let us repeat which political forces appointed the current management...
— GERB, BSP, „There Is Such a People“ and breakaway members of Vazrazhdane, who split away at the very beginning of the term. They were part of the so-called economic majority. I cannot say whether anyone from these parties specifically ordered these people to be appointed. I can only speculate. But the major issue is that representatives of BSP, for example, stated that all this was speculation and that the company should not be granted a concession or sold, but should remain municipal.
— Even if we accept that the current management was placed in an extremely difficult situation, could it have handled it better?
— The situation is difficult because the debts to the state-owned companies are very large. But in my opinion, far greater efforts could have been made on the matters I listed. The debt can be renegotiated. Discussions must be held with the state and it must be explained that the company cannot pay 16% interest. That is crippling. It pays the interest but cannot service the principal. A solution must be found because the situation is critical. I do not know why GERB did not resolve this problem during the many years it was in power.
— The Municipal Council also raised the question of whether the possible involvement of a private operator could create new opportunities for siphoning money from the company. How do you view this concern?
— I cannot say that money is being stolen from „Sofiyska voda“. I can see that losses there have declined, people have water and no one is complaining about its absence. At the same time, we can see that „Toplofikatsia“ is not working well. If a private operator enters, its most likely goal will be to restore the company to such an extent that citizens no longer have so many complaints. Of course, a private operator will seek profit, but it must be approved by the Municipal Council. If the mayor’s proposal is adopted and the World Bank offers adequate solutions, it would be logical to have several options – for the company to be granted a concession or not, to be sold or to remain municipal. The Municipal Council must assess whether the terms are favourable and whether the profit percentage the private operator will receive for managing the network is acceptable. If the terms are not favourable, we continue with the current model. But it cannot be claimed that a private operator will necessarily steal, while at the same time the company has debts of more than EUR 1.3 billion. In my opinion, the question must also be asked whether the company has been drained over the years.
— There is also talk of an intermediary in gas deliveries for „Toplofikatsia“. What do you know about this?
— Yesterday, one of the citizens gave an example involving a gas intermediary. I have also spoken in your studio about an intermediary in the purchase of gas for „Stolichen Avtotransport“. There is a similar case at „Toplofikatsia“ as well. From what I heard from the citizens, the price through this intermediary is higher than if the company bought gas directly from the exchange. I asked the management about this too, but once again we received no answer. There are an enormous number of questions, and the problems are just as numerous. I see no answers from this management. My opinion is that these people should leave. To me, it is absolutely inexplicable how, if I correctly understand the mood in the Municipal Council, they will be appointed permanently in a week. I repeat – these are people appointed by GERB, BSP, „There Is Such a People“ and breakaway members of Vazrazhdane. BSP and „There Is Such a People“ are no longer in parliament, but they continue to have influence in the Municipal Council. And the breakaway members of Vazrazhdane are evidently no longer controlled by the party.
Watch more from the conversation in the VIDEO.