The Slovak Cabinet approved a draft on state subsidies for passenger transportation at the state owned Slovak Railways (ŽSR) for 1999. The agreement allocates 1.657 billion Slovak crowns in state money to cover ŽSR losses from providing passenger transport at regulated prices.
The cabinet also charged ŽSR with working out a cost analysis report for passenger transport and submitting it to cabinet by June.
Regarding ŽSR's massive debts - the railway must repay 11 billion crowns in 1999 alone - Deputy Transport Minister František Kurej said that his ministry had reached a preliminary agreement with the two largest Slovak banks, VÚB and SLSP, to extend the terms of ŽSR loans maturing this year. Kurej warned, however, that until ŽSR's system of financing is completely restructured, its financial situation cannot be solved.
ŽSR losses swelled to 9.31 billion crowns in 1998, mostly as a result of uncovered losses from passenger transport in the amount of 5.35 billion crowns. Proceeds from passenger transport amounted to only 2.06 billion crowns.
ŽSR is in a difficult position, as the state requires that the railway keep its ticket prices low, but is unwilling cover the gap between revenues and costs of passenger transport.
