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Reform looks to cut costs

27 Dec 2010

CZECH REPUBLIC: The Ministry of Transport established a working group last month to study options for merging passenger operator CD and infrastructure manager SZDC into one holding company. This would increase transparency in the flow of subsidies, which are to be cut under plans that were announced on November 15.

The section of SZDC which owns and maintains the infrastructure would be merged with the Road & Motorway Directorate, with its train operating activities becoming part of CD. Around 10000 employees would be transferred from CD to SZDC.

Transport Minister Vít Bárta has announced a KC500m cut in CD’s 2011 subsidy as part of government austerity measures. Half of this represents reimbursement for EC and IC trains, which the state began to subsidise again in 2008 following the loss of cross-subsidy from freight with the creation of CD Cargo. These services will now be operated at CD’s own risk. Subsidy for other non-commercial passenger services will not increase with inflation, and there will be cuts to a staff welfare programme, plus a reduction of headcount by around 1600.

From January 1 incumbent and new operators will pay the same access charges, removing the difference between heavily-subsidised passenger traffic and commercial freight. CD will pay KC270m more in 2011, while CD Cargo will save roughly the same sum. The aim is to encourage rail freight, and special rebates to support intermodal and single-wagon traffic will remain. Tolls on main roads will rise by 50% by 2013, and they will also apply on some secondary roads.