BRATISLAVA, March 4, (WEBNOVINY) – The state plans to sell 66 percent of the rail freight transport company Cargo Slovakia to a strategic investor by July 2012. The Ministry of Transport, Construction and Regional Development suggests this solution in the revitalization program tailored for the three debt-ridden railway companies. The material has already been submitted for interdepartmental review. The ministry of Jan Figel (KDH) opines that selling the entire stake in the company instantly would not be a rational step due to the company’s extremely low value and critical condition. It can be assumed that the economic condition will improve thanks to a decrease in fees for the use of railway infrastructure effective January 1, 2011 and the implementation of the prepared series of inevitable rationalization measures. This is expected to create more advantageous conditions for the sale of the company’s stake, the ministry stipulates in the material.
The sale of the state’s majority stake in Cargo to a private investor will ensure necessary flows of goods and financial stability, efficient management and necessary investments. Proceeds from the sale will be used to repay the financial loan of EUR 166 million. Also, the finances will cover Cargo’s debt towards the railway infrastructure operator Zeleznice Slovenskej Republiky that accrued because Cargo failed to pay the respective fees, as well as other liabilities related to equipment, which together exceed EUR 100 million. If the investor’s activities help raise the value of the company, the sale of the remaining shares under suitable terms can be considered in the future, the ministry outlines its plans. Prior to the sale of the state’s stakes, the property relationships between ZSR and Cargo need to be settled.
Minister of Transport, Construction and Regional Development Jan Figel (KDH) warns that the threat of bankruptcy is hovering over three state-run debt-ridden railway companies provided revitalization measures are not implemented. The revitalization plan for rail companies, which the ministry has submitted to interdepartmental review, is not about layoffs but about saving jobs and higher effectiveness of their operation so that they do not generate losses within two or three years, said Figel at a press meeting on Friday when he informed on the revitalization plan for railways. The current state in the railway sector is no longer sustainable, he underscored.
According to the revitalization program, about 5,000 employees should be laid off from all three railway companies during this and next two years, while 1,200 of them will be white-collars. The rail freight transport company Cargo Slovakia, a.s. is planning to gradually release 1,800 people by the beginning of next year. The railway infrastructure operator Zeleznice Slovenskej Republiky (ZSR) is to lay off 2,700 employees in the course of this and next year. Together 621 employees should gradually leave the state-run passenger rail company ZSSK until the beginning of 2014. In addition to layoffs, increase in train fares can also be expected sometime this year. Director General of the ministry’s railway transport and railroads division Jiri Kubacek said that train fare would increase within the distance of 50 kilometers.
SITA