WHEN proposals were first put forward for a joint venture between the freight businesses of Swiss Federal Railways and Italian State Railways, observers were not slow to raise their eyebrows. SBB has an enviable reputation for punctuality and reliability, whereas FS has a less complimentary image.

No surprise then, that the planned start of operations on January 1 for the Roma-based joint venture Cargo SI is not going to happen. On October 4 SBB announced that the two railways had reviewed the proposals and that integration was proving to be more tricky than originally envisaged. For this reason the two operators had agreed ’to extend the ambitious timetable for integration’, which would also have the advantage that more time would be available to clear up outstanding questions of competition raised by the European Union. Nonetheless, both had agreed to retain the long-term objective of a full merger. In practice, the reasons for delay include serious differences in business culture, and indeed external consultants had to be brought in to try and reconcile opposing points of view.

Chief Executives Benedikt Weibel and Giancarlo Cimoli were due to meet on October 20 to decide how to move forward. In the meantime SBB insists it will proceed with its plan to set up two wholly-owned subsidiaries that would later form the basis for the joint venture. One will employ the 4000 freight staff under conditions that are virtually identical to those of SBB, the other would be responsible for the assets of SBB Cargo. SBB has in any case been careful to build in a break clause, and Cargo staff will be hired to the joint venture for the first two years; only if the project is successful would they transfer to a fully-fledged joint venture.