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Reforms proposed to cut SNCB losses

25 Jun 2012

BELGIUM: In a bid to address the growing debts and operating losses incurred by the national railway, Minister of Public Enterprises Paul Magnette has announced proposals to abolish SNCB-Holding and split the business into two stand-alone companies, operator SNCB and infrastructure manager Infrabel.

Last year the group’s accumulated debts reached €3bn, with rail freight arm B-Logistics reporting a €185m loss. According to Magnette, annual losses are expected to exceed €400m if nothing is done.

Under proposals initially developed by Magnette’s predecessor Inge Vervotte, the holding group would be abolished, and all freight and passenger businesses, including rolling stock maintenance, would be consolidated into SNCB. Infrabel would take responsibility for operating the stations, and a new ‘Rail Shared Services’ unit owned 50:50 by SNCB and Infrabel would provide the personnel and financial support functions which are now handled by SNCB-Holding.

Under the new regime, SNCB would be directly owned by the state, rather than through the holding group. Infrabel would also become a 100% state-owned business, whereas today SNCB-Holding provides 93·6% of its capital but has only a 20% equity stake less 1 share. Safety and licensing of operators would be handled by the Ministry of Transport, with an independent regulator to oversee the whole structure.

Magnette’s proposals have been welcomed by European Commission Vice-President Siim Kallas. However, the unions continue to voice their opposition, and it remains unclear whether the Belgian parliament will endorse the plan.