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NewsCzech version

Government approves splitting off passenger transport from Czech Railways

By: Erich Handl, 14. 01. 2008, More by this author:

Last week, ministers approved the Ministry of Transport’s plan to spin off the passenger transport division of rail carrier České dráhy into an independent subsidiary.

        “Spinning off passenger transport will help simplify its financing; it is the next step in a process that was interrupted in the 1990s,” said Prime Minister Mirek Topolánek. Until now, the railways have financed losses in passenger transport using profits from freight transport. Although the Ministry of Transport has not yet issued a statement on the planned changes, according to available reports, the split should occur by 2010.

Spinning off passenger transport into a subsidiary company is the third stage in the railways’ restructuring process. In the first stage the railways spun off ancillary services, leading to the creation of subsidiary companies such as travel agency ČD Travel, advertising service firm RailReklam and real estate division ČD Reality. The second stage ended last December with the creation of the independent joint stock company ČD Cargo, which took over freight transport.

Two types of trains

From the financial perspective, České dráhy (ČD, Czech Railways) has two types of passenger transport. The overwhelming majority of trains are ordered by the Ministry of Transport and by the regional authorities, which cover provable losses from the operation of, respectively, express trains and local trains. Last year, the railways received Kč 3.4 billion (€ 131.4 million) from the Ministry of Transport for express trains, and another Kč 4.5 billion from the regional governments.

The only trains that the railways operate at their own risk are higher category trains. Nevertheless, passenger transport results in hundreds of millions of crowns in losses each year. Last year, the railways could still cover these losses using profit from freight transport, but this ended once freight transport was split from the railway. One reason for spinning off freight transport was to increase the transparency of financial flows. Since 2005, the number of passengers riding Czech trains has increased every year. Last year the figure was roughly 185 million.

Investments into wagons continue

Despite the approved split, this year ČD will continue to update its passenger vehicle fleet. According to the company’s business plans, this will cost Kč 3.6 billion–Kč 900 million more than last year. ČD will pay Kč 2.4 billion out of their own pocket and the rest will come from a loan from the European railroad financing company Eurofima or from a state subsidy from the Program for the Renovation of Rolling Stock.

The largest item on the shopping list is 100 modern wagons for long-distance transport. ČD plans to put them into service primarily on newly introduced Brno express trains. “Such cars are currently available, for instance, from the German railways,” said ČD CEO Josef Bazala. He added, however, that ČD will issue a tender for the purchase of 100 modernized wagons.

Travelers can also expect new units in large towns and in regional transport, which is financed by regional governments. Next year, ČD is planning to purchase eight suburban CityElefant train units, which will gradually replace the up to 40-year-old electric units, known locally as “pantographs.” ČD now has 34 new Elefants–one set costs roughly Kč 200 million.

According to plans, next year 29 Regionova units should start running on regional tracks. These units were created by converting old 810 series self-propelled units. A two-car Regionova costs Kč 21 million, a three-car unit comes in at Kč 37 million. Currently, a total of 46 Regionovas, most of them two-car units, are operating in the Czech regions. By the year 2010, the railways should have more than 100.

Other finances will go to converting old postal wagons into driving trailers and modernizing old wagons for self-propelled train units.


Outdated trains

One of the greatest issues for České dráhy (ČD) is its outdated vehicle fleet. Despite billions of crowns of investments, the fleet is only slowly being upgraded. It is not possible to statistically determine the average age of all vehicles, but the average age of “pantographs” is 27 years. The record is held by the 451 and 452 series, most of which will turn 40 this year.

The most widespread self-propelled unit on Czech rails is the 810 series, of which the company owns roughly 500; they have an average age of 27 years. The oldest regularly employed vehicle is the 705 series locomotive running on the narrow-gauge track between Třemešná and Osoblaha in North Moravia. It rolled out of the factory in the mid-1950s.

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