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Rail Cargo Austria :End of Losses Not in Sight

Published: October 7, 2010; 13:27 · (Vindobona)

The losses of the ÖBB subsidiary Rail Cargo Austria rise to at least 200 million euro The end is far away. Lay offs and restructuring are necessary.

Rail Cargo Austria :End of Losses Not in Sight / Picture: © Rail Cargo Austria

The losses of RCA will turn out higher this year than previously thought, announced ÖBB boss Christian Kern in interviews.

Previously, a loss of 124 million euro had been predicted. Now, says Kern "a one before the three-digit loss will be most probable." Profits should be registered by RCA only by 2014.

The Hungarian subsidiary Rail Cargo Hungaria (RCH, formerly MAV Cargo) should generate this year a loss of 33 million euro. Should the Hungarian government maintain the announced increase in fees, the loss might be even higher. Kern sees "no alternative" to the planned dismissal of 460 employees in Hungary and only as a "first step". How many jobs would eventually be laid off, is still an open question.

In connection with the end of 2008 purchase of MAV Cargo, on Monday there were house searches at the homes of three former ÖBB managers. The Corruption Prosecution has meanwhile instituted a process for corruption and suspected  disloyalty against two managers and "unknown". The investigation is based on the suspicion of bribe payments to a Hungarian counseling agency.

RCA has spent 650 million euro of capital, because of "a mixture of write-offs and losses," said Kern. Value reductions, primarily for freight cars and logistics centers are said to amount to 60 million euro in 2008 and 5.2 million euro in 2009. At ÖBB-Produktion GmbH, railcar devaluation is said to amount to 108.5 million euro. Globally, many freight services are said to have a cost recovery rate of only 30%, something Kern refers to as a "subsidy from industry and shipping”.

In Austria, the freight traffic has shown an operating loss of 54 million euro in the first seven months of the year. RCA wants to get into more profitable segments such as specialty chemicals, steel and raw materials; it should be possible to attain by 2015 savings of 60 to 65 million euro. According to Kern, ÖBB only showed profits "de facto" on the western railway line.

ÖBB are facing reorganization: "we will no longer offer certain types of traffic and we will have a debate over the branch lines”.