Railways firm to lead sell-off plans

The government’s 2010 privatization program will focus on the partial sell-off of the Hellenic Railways Organization (OSE) and development of its real estate assets. After Easter, Finance Minister Giorgos Papaconstantinou will unveil plans he has prepared on the privatization front after Prime Minister George Papandreou has given the final nod. The government is targeting 2.5 billion euros of revenues from privatizations this year but it remains doubtful as to whether it will achieve this target. Efforts are likely to focus on finding a strategic partner for loss-making TRAINOSE SA, the OSE subsidiary that provides transport services, by offering up to 49 percent of the company and its management. However, before any attempts are made at finding potential investors, the government will need to improve TRAINOSE’s operations and restructure the company. Sources indicated that there will be no sackings of its 2,000 employees but a number of staff members will need to be transferred to other government services to lighten TRAINOSE’s labor load. The company is believed to need to cut staff numbers by about half in order to start turning a profit. On the restructuring front, the maintenance of trains, currently handled by OSE, will need to be transferred to TRAINOSE. At present the state is paying 130 million euros per year for maintenance costs. However, the manufacturers of trains used in Greece estimate that the figure should be closer to 50 million euros. A potential investor in TRAINOSE is likely to be drawn to the company due to the popular Athens-Thessaloniki link. For the rest of the train routes, the government is planning to pass on their operations to a transport company and subsidize the cost of their operations, as it does with public service air routes.

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