The Hellenic Railways Organization (OSE), is dangerously following the flight path of Olympic Airways, as its deficit climbs to stratospheric heights. The one thing the two companies do have in common is that they are in desperate need of drastic measures to tackle the tragic situation of the corporations’ finances, while on a monthly basis OSE generates seven times more losses than Olympic. All observers and analysts agree that the separation of the corporation’s operational and infrastructure arms was carried out without adequate planning, which is clearly reflected now in the company’s finances. According to the 2005 financial report, OSE’s losses came to -4.3 billion and rose to -5.2 billion the following year, an increase of 855 million euros. On a monthly basis this amounts to -70 million, compared with just -10 million in the case of the country’s ailing national carrier. What remains unclear, however, is the magnitude of the losses for 2007 by the end of the year, as Transport Minister Costis Hatzidakis spoke of -7.5 billion, but alternate government spokesman Evangelos Antonaros dismissed that figure and OSE officials suggest that accumulated losses soared by -800 million in 2007 (which represents 3 percent of the country’s gross domestic product). What is certain is that any company gradually entering conditions of full competition (according to the European Union directive imposing the complete liberalization of the passenger and freight rail market by 2010) should not show such a high deficit which, if the situation does not improve, will reach 5 percent of GDP by 2010. OSE was dealt a major blow when it was split into five companies, as operating costs soared since the maintenance of four governing boards is very expensive and close monitoring of the subsidiaries is virtually impossible. The leadership of the ministry is expected to proceed with the reunification of OSE companies within 2008. Sources suggest that the restructuring plan for OSE foresees the continued operation of TRAINOSE (transport services for passengers and cargo), while the other companies, EDISY (infrastructure), ERGOSE (which manages the investment program) and GAIOSE (real estate) will merge if this is considered possible; otherwise they will form two separate companies. Today the corporation operates as a holding company with OSE as the parent firm, EDISY, TRAINOSE (including the Proastiakos suburban railway) and GAIOSE as subsidiaries, while ERGOSE operates as an independent company. In 2006 the group increased its revenues by 1.2 percent (totaling -68.8 million against -67.9 million in 2005) through passenger transport. The financial hemorrhaging of OSE comes from its loan obligations, with the company being the number one among state firms in this domain. OSE’s borrowing needs are expected to reach -1.564 billion in 2008, from -1.245 billion this year and -968.74 million in 2006. Of the average annual deficit of -600 million, only -270 million corresponds to OSE debt, as the rest relates to past loans. The total figure for the payment of interest and obligations from 1998 to 2005 reached -1.4 billion.