Toplofikatsia Sofia, the capital's district heating company, is heading for bankruptcy because the state sells it gas at a high price but makes it sell heat cheaply, Sofia City Council chair Tsvetomir Petrov said. The company's management will appear before a council committee next week.

Petrov spoke at a briefing on the state of Toplofikatsia and its many breakdowns. The council is the company's principal, which means its owner.

He named a second reason. Over the past 15-20 years the company has been badly run, and the heating network has had no major repairs.

Besides its debt, Toplofikatsia pays huge interest, which on some of its loans reaches 15-16%. Petrov said this shows how the state treats the company.

The council chair believes the decisions of the Energy and Water Regulatory Commission (EWRC) earlier this month make things harder. The regulator raised the gas price again, this time by 30%, while the price of heat will not change. Petrov asked for a clear answer on who will pay the difference.

He said the situation is clear and the council will try to solve the problem in the long term.

Yesterday Sofia mayor Vasil Terziev sent a statement to the media through Sofia Municipality. He believes the city council must take responsibility for the company's future. The mayor said the way out is a new management model that would draw billions in private investment, technology and experience.