Railways – the weak spot of the SEE transport system 19Mar

Published by ValentinPetrov in Blog | Tagged , , , , ,



The general picture of Southeast European railways is far below the average in Europe. Many railway routes are being closed in SEE recently and unless the politics on the matter is changed, the sector in the region is about to slow down even further.

The Bulgarian railways, managed by Holding BDZ EAD (www.bdz.bg), are in a deteriorating technical state and its losses are mainly due to weak assets management and lack of strategic focus.

Serbia is not much different than Bulgaria. The national railway company Zeleznice Srbije AD (www.zeleznicesrbije.com) generated profit in 2011 because of financial injection after three years of losses. The country’s railway infrastructure needs urgent improvements. Only 2.5% of the Serbian trains reach the speed of 100 km and the maximum speed of 25% of all the trains is barely 30 km.

Romania’s railway company Compania Nationala de Cai Ferate (CFR) (www.cfr.ro) is in a better state compared to the other companies in SEE in the last thirteen years since it realized more investments as a result of an expansive modernisation programme.

Net Profit/Loss in mln EUR

Another SEE country, Greece, is also making attempts to privatise its railways, but with no success so far.

All of the above facts are a consequence of the opposition of some of the European governments to the efforts of the European Commission to enhance the competition in the sector.

The railway operators directly depend on the governments and a lot of issues should be solved. As long as the railway infrastructure in the region is poor and most of the assets are old, people will avoid trains and tend to use more reliable and comfortable ways of transportation.

Although most of the countries in SEE region are facing budget deficits, a serious portion of money should be invested now, which will return more profit in future and make the railways a preferred type of transportation. The perspectives of the railway business remain hidden for the private sector in the region and this is a common case for all of SEE. Privatisation and investments together seem to be the way out of the current crossroad.

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