ECONOMY

OSE deficit jumps to 7.5 bln euros

The accumulated deficit of the Hellenic Railway Organization (OSE) has soared to 7.5 billion euros, according to Transport Minister Costis Hatzidakis. The splitting of the company into those of its operation and its infrastructure, meant to avoid OSE turning into a new Olympic Airways, has actually cost it dearly as it has added -2 billion to the deficit within just a year and a half. In 2004, then Transport Minister Michalis Liapis had said in Parliament that the company’s deficit reached -3.5 billion. The ministry sent a memorandum to the prime minister’s office describing the financial losses since the split, which officially took place on January 1, 2007. That has now been returned to the ministry and is reportedly accompanied by clear guidelines for the reunification of the two companies. Sources suggest that the restructuring plan for OSE includes retaining the segment TRAINOSE (transport services for passengers and cargo), while the other companies, EDISY (infrastructure), ERGOSE (management of the investment program) and GAIOSE (real estate) will merge if that is deemed possible; otherwise they will form two companies. The cost of operating four firms seems unbearable as there are four governing boards, while the difficulty of monitoring four companies leaves great scope for bad management. The ministry is also reviewing the profitability of most OSE routes, while examining alternative scenarios for the loss-making ones. At the moment, the Patras-Athens-Thessaloniki line is making a profit, while some cargo routes are also drawing gains. The ministry may also seek the subsidization of some routes from local authorities, as ticket increases will not suffice to cover the deficits.