RAILWAY PRESIDENTS are frequently political appointments. None more so than in Italy, where Giorgio Crisci has been replaced by Claudio Dematté as President of Italian State Railways. A crisis swept through the 16000 route-km network in February, and rumours abounded of the entire management board resigning. It was not quite as drastic as that, but it was clear that the political demand for change had to be met.
Not that FS senior management has been idle. Successive special administrators sitting in the chief executive’s chair have succeeded in cutting the number of staff on the payroll to 117000 from as many as 220000 not much more than 10 years ago. Current Chief Executive Giancarlo Cimoli wants another 20000 to go in the next two years, but Transport Minister Claudio Burlando is resisting this with a demand that no more than 2000 jobs should be lost.
The Roman affliction is familiar - the FS finances remain stubbornly out of control, with last year’s losses nudging the 6000bn lire mark, substantially more than the 4900bn in the budget. It has not helped that the freedom to set fares and tariffs that FS needs has been denied, and while revenue rose by 10% last year, cost rises far outstripped this.
Meanwhile, the shadow of sundry financial scandals continues to lurk over the railway, with Cimoli under investigation for what are termed ’tax irregularities’. On top of this comes the inevitable and apparently interminable industrial strife, with strikes in March following a management decision to dismiss two drivers who had allegedly made ’mistakes’.
At the same time the FS image has been seriously dented by a series of incidents and minor accidents that have generated a wave of adverse media publicity. Not least among these was the stranding of an ETR500 high speed train without power, obliging a trainload of people to endure a rather long wait on board with no air-conditioning and no exit doors working. Although the Italian media insist on talking about safety problems, the difficulties are largely to do with reliability.
Another challenge facing the Cimoli-Dematté duo is to head off the threat of EU action against Italy for not implementing railways directive 91/440. Attempts to restructure so that separate accounting for operations and infrastructure is possible should bear fruit this year, but it is not clear how much progress has been made with plans to move the five Strategic Business Areas into stand-alone operations.
H On March 10 FS acquired the remaining 57% in TAV SpA which had previously been in the ’private’ sector, although some of the shares were owned by banks in the public sector. The deal sees TAV handing over its high speed lines to FS, which will be charged fees for their use to pay off the debts incurred by TAV. FS will be responsible for their maintenance and capacity management, but is required to offer a number of paths to other operators. Next month should see the last permits for construction of the Milano - Bologna line granted, and work is now expected to start early in 1999. o