July 16, 2013

Slovakia to reform railfreight operator

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Slovakia to reform railfreight operator Quintus Vosman

THE Slovakian government announced on July 10 that it has adopted proposals to reform struggling state-owned railfreight operator ZSSK Cargo with the creation of three separate business units by the end of next year.

One subsidiary will be responsible for all railfreight operations, while two fleet management units will oversee maintenance of locomotives and rolling stock. In a second phase, ZSSK Cargo will seek private sector participation from "experienced partners" in these subsidiaries, although the parent company will retain a controlling interest.

In a statement on its website, ZSSK Cargo said it does not intend to make any further reductions in the size of its workforce as part of the reforms, although the company is cutting 600 posts this year.

ZSSK Cargo CEO Mr Vladimir Luptak described the plans as "an important step towards achieving sustainable development and equitable management of the company."

In February ZSSK Cargo held talks with Poland's PKP Cargo over a potential takeover, and the Czech and Slovak governments said in January they were considering a merger between CD Cargo and ZSSK Cargo, although both proposals ultimately came to nothing.

ZSSK Cargo has accumulated debts of around €600m and the company has been hit hard in recent years by the economic downturn and the slump Slovakia's steel industry.

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