Czech Govt to separate rail freight from ČD Cargo
Prague Daily Monitor: 23 October 2007
Prague (CTK) - The Czech government Monday approved separation of cargo transport from the national rail operator Ceske drahy into independent unit CD Cargo as of December 1, Prime Minister Mirek Topolanek has told a news conference.
CD Cargo will have a share capital of Kc8.8bn.
Some 13,000 of CD's current 57,000 staff will be transferred to the new company.
The government hopes the change will make the financing of railway transport more transparent. It particularly expects the cross-financing of loss-making passenger transport from the profits of cargo transport to end. This cross-financing involved Kc600m annually.
CD general director Josef Bazala said CD wants higher subsidies for passenger transport from the state budget. "The Transport Ministry is now looking for a solution," said spokesman Karel Hanzelka.
He added that the ministry will most probably propose to the cabinet the spin-off of passenger transport into an independent unit as well.
CD's cargo transport is the fifth largest in Europe, and the last in central Europe that is not operating independently yet.
CD annually transports 80 million tonnes of goods and always makes a profit from cargo transport. Last year, the profit stood at Kc1.5bn.