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ŽSR asks for more money as losses continue

SLOVAK railway company Železnice Slovenskej Republiky (ŽSR) is planning a Sk3.14 billion loss in 2002. At the same time, the company is seeking a state guarantee on Sk8.4 billion in loans.
ŽSR is expected to borrow 160 million euro (Sk6.7 billion) from JP Morgan Securities and Tatra banka, as well as Sk2 billion from Ľudová banka, to roll over loan and interest payments on a Sk7.4 billion loan that matures this year. The money is to cover losses on passenger transport between 1994 and 2001.
An additional Sk1 billion should be allocated for investment and development under the ŽSR Project of Transformation and Restructuring, adopted in September 2000.

SLOVAK railway company Železnice Slovenskej Republiky (ŽSR) is planning a Sk3.14 billion loss in 2002. At the same time, the company is seeking a state guarantee on Sk8.4 billion in loans.

ŽSR is expected to borrow 160 million euro (Sk6.7 billion) from JP Morgan Securities and Tatra banka, as well as Sk2 billion from Ľudová banka, to roll over loan and interest payments on a Sk7.4 billion loan that matures this year. The money is to cover losses on passenger transport between 1994 and 2001.

An additional Sk1 billion should be allocated for investment and development under the ŽSR Project of Transformation and Restructuring, adopted in September 2000.

The company plans to invest Sk6.8 billion this year, mostly on development of rail infrastructure. The investment, most of which will come from loans, will go largely to upgrade three sections of the main east-west Bratislava-Žilina-Košice-Čierna nad Tisou railway line to permit speeds of 160 km per hour, compared to current maximum speeds up to 110 km per hour.

The upgrade is part of a project to bring railway systems in European Union candidate countries in line with Trans-European Network norms, a system of rail guidelines established in 1994. The goal of the project is to establish high-speed transport corridors by 2015.

According to ŽSR Director Ladislav Saxa, "by 2006 the track between Bratislava and Žilina should be ready, and later all the way to [Ukraine border depot] Čierna nad Tisou. The goal is to allow travel from Bratislava to Košice in three-and-a-half hours." The trip now takes at least five hours.

Construction firm Doprastav won the tender to rebuild the Bratislava Rača - Trnava section in March. The EU's Instrument for Structural Policies for Pre-Accession (ISPA) programme will be funding 75 per cent of that project, expected to cost 42 million euro (Sk1.7 billion).

ŽSR has struggled financially since its inception, largely because of overemployment and uncovered losses from regulated passenger transport rates. ŽSR saw annual losses of between Sk4.1 billion and Sk5.9 billion between 1997 and 2000. In 2001, the firm reported a Sk3.9 billion loss.

In January 2001, the railway operator was split into two companies. ŽSR continues to operate the rail network and service activities, while Železničná Spoločnosť (ŽS) has taken over transport and commercial activities. In February, ŽS announced a projected Sk72.4 million profit for 2002.

Both companies became full members in the Community of European Railways (CER) in March, after two years of participation in the organisation as an observing member.

The CER advises the European Commission and membership will give ŽSR and ŽS greater influence in shaping the organisation's recommendations to the EU on rail transport policy.

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