Sofia mayor Vasil Terziev says a concession is the only workable option for Sofia's district heating company, Toplofikatsia Sofia. He told a meeting of Sofia City Council today on the heating and hot water crisis. Thousands of people in the capital have no hot water or heating because of breakdowns in the heating network. The company owes 1bn euros.

Earlier today, council chairman Tsvetomir Petrov told a briefing the company is facing bankruptcy because the state sells it gas at a high price and forces it to sell heat cheaply. At the meeting he gave a second reason: for the past 15-20 years the company has been badly run, and the heating network has had no major repairs.

How it all started: Sofia council chief says Toplofikatsia Sofia is heading for bankruptcy over costly gas

The company belongs to the city, and the council is its principal, meaning its owner. Terziev expects the report with the financial, economic and technical analysis of Toplofikatsia to be assigned at the next session. It should show the state of the company and how it can be stabilised. The council will then decide its future.

The mayor says a concession would bring in the investment the company needs. It would also let the debt be restructured, meaning it would be repaid on new terms.

Dimitar Vuchev, a city councillor from GERB, said his group backs starting a concession procedure. He said it will look at the report once it is submitted. Vuchev puts part of the company's problems down to the gap between the market price of natural gas and the price for consumers, which he calls social.

"BSP for Bulgaria" is against it. "For us, a concession of Toplofikatsia Sofia is not an acceptable option, because it is usually for a long period, around 35 years," city councillor Nikolay Velchev told reporters at the council.

He said that under a concession the city would receive only a concession fee, extremely small compared with the profit the company could make. Velchev believes Toplofikatsia has strategic importance for Bulgaria's energy system and that quick decisions are needed to bring it back to health.

"Save Sofia" will propose that the company's management report every two weeks to the council's Committee on Engineering Infrastructure and Energy Planning. The group will also ask for an extra agreement on the debts to Bulgargaz that would allow repayment of the principal, meaning the main sum of the debt, to begin.

Next week, "Save Sofia" councillors will send letters asking for an urgent meeting to Bulgargaz, the Bulgarian Energy Holding, the Energy and Water Regulatory Commission and the Ministry of Energy. In the same week, Petrov expects the management of Toplofikatsia to be questioned by a council committee.

This morning, residents of Mladost 3 protested again in front of block 358. The neighbourhood has had no hot water since August because of planned repairs. If the deadline for restoring heating is missed, residents are ready to protest again.

Since yesterday, parts of Iztok, Izgrev, Dianabad, Musagenitsa, Studentski Grad, Mladost, Lozenets and other districts in eastern Sofia have also had no heating or hot water.

A few days ago, the Consumer Protection Commission said it will file two class actions against Toplofikatsia Sofia if the company fails to meet its obligations to people left without hot water and heating for a long time. The commission has received many complaints from Hristo Botev, Druzhba, Slatina, Dianabad, Musagenitsa, Mladost, Darvenitsa and other districts supplied by the Sofia-Iztok thermal power plant.