The state heating monopoly Toplofikatsia is planning to seize the property of those who have not paid their heating bills.

July 30 was the deadline for paying overdue bills. The state-owned company said it would start legal action to collect unpaid accounts after that date.

The deadline was later extended to today as in Sofia alone nearly 105,000 people have not paid their heating bills. About 35 per cent of them are already paying back their debts, Toplofikatsia said last Friday. It added 16,000 Sofia customers owing 55 million leva will be sued.

Thousands of Bulgarian households have not paid their heating bills for years. Until recently, it was easy for them to avoid paying as Toplofikatsia did not have an effective way of collecting unpaid bills.

But in early June, faced with the possibility not to have any money for the next heating season, Toplofikatsia decided to take drastic steps. It will sue its debtors to settle bills through the court. In the beginning of July, it sent letters to people warning it would seize their property if they did not pay.

The central heating system was created during the communist era, when Bulgaria had no problem supplying heating plants with inexpensive or even free resources coming from the former Soviet Union. After 1989, this turned into a problem, because of changed economic relations between Bulgaria and Russia. The price of central heating is formed on the basis of market prices for coal and gas.

The central heating price, which has remained unchanged since July 5, 1999, remains the company's main problem, as it is not high enough for the company to cover its costs. It is unclear if the new cabinet will allow an increase in heating prices.

The natural gas price has substantially increased since July 1999 - from 178 leva per 1,000 cubic meters to 268 leva. The price of the gas needed to generate heating energy exceeds that of the price charged for heating, officials from Toplofikatsia said. Eighty per cent of their revenues go to purchasing gas.

Another difficulty is that the state subsidizes Toplofikatsia and the subsidies are supposed to be lowered each year to answer the requirements of the International Monetary Fund and the World Bank.