ECONOMY

State transport runs out of gas

State transport companies have been experiencing difficulties ensuring that they have the necessary resources due to serious problems in meeting their borrowing requirements. For the first time yesterday, workers at the ETHEL blue bus company remained unpaid despite the fact that their scheduled monthly payday was two days ago. Officials have insisted that the salaries will be paid but employees have decided to walk off the job, immobilizing buses, until they get their money. Problems are also on the rise at the Hellenic Railways Organization (OSE) as management has informed employees that they will receive their summer bonuses on July 16, rather than July 1 as originally promised. A key reason for the economic problems experienced by OSE and the Athens Urban Transport Organization (OASA) is their inability to borrow money. The Public Debt Management Agency (PDMA) recently attempted to borrow 400 million euros on OSE’s behalf but managed to obtain just 175 million euros at the steep interest rate of 6.8 percent. Data show that the transport companies have absorbed about two-thirds of their annual funding just five months into the year. At the same time that these economic difficulties are surfacing, the Transport Ministry is trying to reduce the monies being poured into transport companies from 75 percent of their total budget to 50 percent. However, the transport groups seem unwilling to be weaned off state funding. According to sources, OASA informed PDMA by mail on June 11 that it needs money to cover fixed expenses such as salaries, social security contributions, taxes and fuel. The letter stressed that if the money is not found, the company faces the prospect of being fined heavily in a development that would offset any financial benefits arising from cuts to employee salaries. OASA’s borrowing requirements for 2010 amount to about 650 million euros. In 2009, its short-term debt skyrocketed 680 percent from the previous year to 295 million euros. Sources added that OASA needs the first 400 million euros by August and an additional 200 million euros by the end of the year.