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Government OKs aid for railways, ZSSK Cargo to be split into three subsidiaries

The Slovak government plans to allocate €141.5 million to the public freight railway sector and create three new subsidiary companies out of the freight carrier ZSSK Cargo, as part of railway transport support measures, reads the proposal on freight railway transport consolidation that was passed by the government on Wednesday, July 10. This means that the freight carrier will be compensated for a portion of the money it paid to state-owned infrastructure owner ŽSK for using its lines in 2010. The carriers are set to divide the remaining €74 million among themselves, with the 2014-16 infrastructure fees for freight carriers slated to be decreased - a measure that will cost the state another €67.5 million.

The Slovak government plans to allocate €141.5 million to the public freight railway sector and create three new subsidiary companies out of the freight carrier ZSSK Cargo, as part of railway transport support measures, reads the proposal on freight railway transport consolidation that was passed by the government on Wednesday, July 10. This means that the freight carrier will be compensated for a portion of the money it paid to state-owned infrastructure owner ŽSK for using its lines in 2010. The carriers are set to divide the remaining €74 million among themselves, with the 2014-16 infrastructure fees for freight carriers slated to be decreased - a measure that will cost the state another €67.5 million.

"The freight railway transport deserves more support. If the cargo that is currently transported via rail were driven around on trucks, there'd be an additional million lorries on Slovak roads every year," said Transport Ministry spokesman Martin Kóňa for the TASR newswire. Within the changes in store for ZSSK Cargo in terms of the new subsidiaries is a company to operate freight wagons, with ZSSK Cargo set to sell the majority of its shares to a strategic partner but retain a degree of control. Once this company begins to operate, the ministry expects it to see a profit of more than €3 million.

The second subsidiary company is to repair and provide maintenance for wagons and locomotives. Its partial acquisition by either passenger carrier ZSSK Slovensko, or some other business partner via capitalisation, will be considered and the company is expected to run with a balanced budget. The third company is to operate intermodal transport, with some of its shares to be sold to another business partner under the condition that Cargo retains an active role in controlling the company. This subsidiary is estimated to earn a profit of up to €2 million a year.

The Sme daily wrote in its Thursday issue that the future division of ZSSK Cargo could be marred by the lawsuit of Cypriot company Lancillon Limited, which is asking for €82 million in lost profits from back in the era of former prime minister Vladimír Mečiar (Movement for Democratic Slovakia, HZDS). Transport Minister Ján Počiatek plans to turn to Justice Minister Tomáš Borec to look into the steps taken by judge Miriam Repáková, who is deciding over the suit: she is suspected of having sided with Lancillon, as she used to work with the person who represented the company, and she did not hand over the complaint of bias from the state to the regional court – which she was obliged to do. The case has still not been decided.

(Source: TASR, Sme)
Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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