THE RETURN of Robert Fico to the prime minister’s office may dust off plans to build a broad-gauge railway track across Slovakia, a project originally mooted during his first government. Ľubomír Vážny, Fico’s previous transport minister who is likely to fill a new position as deputy prime minister for large transportation and energy projects, has already indicated that the idea – which carries a price tag of over €6 billion – is being considered, pending further evidence showing it is feasible and financeable. But Vážny seems convinced of its merits, saying that the arguments “undoubtedly speak in favour of the project”.
“If implementation of the project is launched, it will gradually generate up to 11,000 work positions, but not earlier than before five years,” Vážny stated, as quoted by the SITA newswire on April 2. He added that if proper stress were laid by the state on better use of the current railway infrastructure it would not have sufficient capacity over the long term. After the project is complete Slovakia would then “obtain the status of a transit country”.
Vážny said his idea is to execute the project through a public-private partnership (PPP) in which the state would not directly participate in financing its construction or its later operation and would act only to secure the required permits and offer parcels of land at its disposal.
Questions about the economic return from such a large investment and its actual benefits to Slovakia must still be answered, Vážny said.
The project’s recent history
Breitspur Planungsgesellschaft, a company created in 2008 by the state-run railways of Austria, Slovakia, Ukraine and Russia to expand the broad-gauge railway track from Košice to the Twin City region of Vienna and Bratislava, states on its website that constructing the track will result in a rail system linking eastern European and Asian markets directly with the wider European market, removing time delays and providing a green light to what it calls environmentally-friendly transportation for the future.
Extending the broad-gauge track across Slovakia will create a central rail network and corridor for movement of goods that stretches for 8,000 kilometres and will reduce transport periods via rail to 15 days compared to the 35 days now required for transport of goods by ship, according to the website, adding that freight capacity would be at least 16 million tons per year.
On March 16 last year the departing government discussed the results of a pre-feasibility study on construction of a 430-kilometre extension of the broad-gauge track that currently ends in Košice across Slovakia to a terminus in Austria, along with two new railway terminals – one in Parndorf, Austria and the other in Nové Zámky, Slovakia. The pre-feasibility study put the total investment in laying the track and building the new terminals at an estimated €6.36 billion. The initiators of the project, who founded the Breitspur Planungsgesellschaft joint venture, are four state-owned rail companies: ÖBB from Austria, ŽSR of Slovakia, UZ from Ukraine and RZD of Russia.
The pre-feasibility study was prepared by Roland Berger Strategy Consultants of Germany and it found that extending the broad-gauge track from Košice to Austria is technically and legally feasible and would draw a significant amount of freight transport. But the study added that questions about financing for the project were unanswered and suggested that the most credible way to finance it was by using public funds.
Slovakia’s changing governments have taken different positions on the project, with the first Fico government endorsing the idea and the Radičová government subsequently shelving it after the cabinet took no decision following its review of the pre-feasibility study last March. The then transport minister, Ján Figeľ, stated that extension of the track across Slovakia was not needed because of the low level of freight transport currently moving by rail.
Peter Staněk, a macroeconomist at the Institute of Economics of the Slovak Academy of Sciences, told a press conference last August that the project would be beneficial for Slovakia, arguing that the European Union needs the Chinese market and vice versa.
“Cooperation with China would be a long-term project for tens of years that would be beneficial for both sides,” the economist said.
Staněk said he saw several layers of benefits resulting from the project: the track construction would create jobs in Slovakia and help its faltering construction sector; and completion of the rail corridor would allow expansion of water transport on the Danube and Rhine rivers. He stated that it is necessary to view the project not only through Slovak eyes but to see it as part of wider global changes that affect the eurozone.
Ľubomír Palčák, head of the private Transport Research Institute (VÚD) in Žilina, wants to see a more detailed study of the project.
“The construction of this new interconnection has a political, technical, technological, social and environmental scope, and particularly an economic dimension,” Palčák told The Slovak Spectator.
“Based on our rough calculations it will be necessary to gradually increase annual transport across this corridor to 35-40 million tons so that the project’s estimated investment cost of about €6 billion can have a profitable return.”
Palčák told The Slovak Spectator that the idea for the project dates back to a period when there was insufficient capacity on the railway tracks between Košice and Žilina, but he noted that there is now free capacity on that route because demand for rail transport has decreased. He said the so-called southern route from Bratislava to Košice via Zvolen has also been gradually modernised and is currently used at about 50 percent capacity. Palčák said a gradual but extensive modernisation is being prepared at the switching station in Čierna nad Tisou and that the intermodal terminal located in Dobrá could also be expanded.
Palčák noted that the project has some strong political aspects.
“The Russians will insist on this project and Slovakia will only decide whether it will participate or not,” Palčák said, adding that assessment of the project’s variables requires preparation of a very detailed and comprehensive feasibility study as well as good predictions about the financial and economic and non-economic outcomes through a comprehensive cost-benefit analysis.
Detailed information on the results of the previously prepared pre-feasibility study are not available, according to Palčák, so he said it is difficult for him to take an expert position. But he did point out that while freight is predicted to flow west from Russia and eastern Asian countries he hears no one talking about freight that could be shipped on the track in the opposite direction.
“This is a very complex issue with a large number of as-yet unspecified inputs and factors, including possible impacts on other spheres,” Palčák stated, urging that the project undergo thorough discussion by reputable experts.