BUSINESS IN SHORT

Cargo to get three subsidiaries

THE STATE-owned rail freight company Cargo is facing grave financial problems. The Transport Ministry is planning to sell parts of it as a solution.

THE STATE-owned rail freight company Cargo is facing grave financial problems. The Transport Ministry is planning to sell parts of it as a solution.

Cargo currently owes about €500 million, including €130 million to the state, which it lent to the railway company years ago, according to the Sme daily. The financial situation has continued to deteriorate, after the crisis caused the volume of transport to drop from 49 million tons in 2007 to 33 million in 2008.

The Transport Ministry came up with the idea to divide some of the company’s activities and assets into subsidiaries; one to manage freight carriages, one to manage the transshipment of goods and one to repair machines and carriages. The subsidiaries would be open to private investors, which could bring Cargo over €200 million, the Sme daily reported, quoting the document that the ministry prepared for a cabinet session. 100 percent of the parent company, Cargo, should remain in the state’s hands. Prime Minister Robert Fico has repeatedly stated that no strategic company (including Cargo) will be privatised under his government.

“It’s hidden privatisation,” Ondrej Matej from the Institute of Transport and Economy and a former advisor to prime minister Iveta Radičová, told Sme.

The new Cargo subsidiaries, which will most likely be controlled by private businesses, will be profitable, while the parent company will continue accumulating losses, Matej predicted.

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