AUSTRIAN Federal Railways is to be restructured next year into a state-owned holding company and five independent subsidiaries, under proposals announced by the government on October 2. Separate business units will be created to manage passenger services, freight, infrastructure construction, network operation and maintenance, and personnel.

Two days earlier Finance Minister Karl-Heinz Grasser and Infrastructure & Transport Minister Hubert Gorbach announced that they had reached agreement over the treatment of the railway’s debts. The state will take over around €6bn of ÖBB’s €10bn historic debt. Annual subsidies of around €4·4bn a year, which account for almost 7% of the state budget, will be cut by €1bn a year between now and 2010. ÖBB will get an operating subsidy of around €2bn, and will have to borrow €800m a year to fund its capital investment, although this will be underwritten by the government.