JSC Serbian Railways


For European Railway – three billion euros

-In order to completely modernize railway traffic in Serbia and raise its standard on the European level, more than Euro three billion is needed. Out of this amount, only for the modernization of Corridor 10 through Serbia about Euro 1. 25 billion is needed”–said the Director General of “Serbian Railways” Milanko Šarančić M.Sc. and expressed expectation that it could be achieved in the next seven years.

-The first major effects in the traffic functioning and service quality will be felt in four to five years. Of course, the modernization of the railway can be accomplished only with help of the State and Serbian Government, which, for the sake of the truth, shows immense willingness to help and essentially start solving the strategy of our development – emphasizes Šarančić.
According to his words, at the beginning of the 2001 “Serbian Railways” had total foreign debt in the amount of around Euro 600 million. After the write-off of the part of debts to Paris and London Club, Serbian Railways remained with the foreign debt of about Euro 192 million, and because of the old and new credit commitments, that debt today amounts to Euro 232 million. Based on the foreign debts, the Serbian Railways expect regular annual assignments in the next eleven and half years.

– Last year we paid off about Euro 33 million of foreign-exchange debts, which means that we paid every day approximately about 107,000 dollars. This year we are looking into total foreign-exchange commitments, in the name of foreign-exchange debts of about Euro 42 million, that is approximately 120,000 euros per day. These are, mainly, commitments from the eighties and nineties, which are now due, and they have to be fulfilled. For example, these days four and half million dollars will become due, in the name of credit commitments of railway node Kosovo Polje, from the period of 1987-1989. “Serbian Railways” do not pay their foreign-exchange debts from State subventions, but from their own income, and we manage to fulfill them mostly owing to income from transit” – says Šarančić.

– Last year we generated the income from transit of Euro 48 milion, and in the 2007 we expect Euro 55 milion . For the sake of comparison ”Serbian Railways” ”recorded” foreign-exchange income of only Euro 2 million in 2003.

Šarančić announced that there would would be talks with the Serbian Goverment about financial consolidation of the railway, which would involve taking over by the State of the foreign commitments of our company, as it had been done in almost each country in transition. For the sake of comparison, in Croatia, the State took over all foreign-exchange debts of the railway, and in the period of five years about Euro 2 billion was invested in Croation Railways.

Speaking about financial situation on the railway, the Director General, emphasized that our company has, for the first time last year, generated transport income that was bigger than State subventions, and, also, that we fulfill our regular, current financial commitments from the business transactions more efficiently.

-In the following period we expect credits from European Bank for Reconstrucion and Development, in the amount of Euro 60 milion for the procurement of 1,100 new wagons, as well as Euro 80 milion from the European Investment Bank for the modernization of the Corridor 10, and for the electrification of 96 km of railway line Niš-Dimitrovgrad, we will apply for means of National Investment Plan. Beside that, “Serbian Railways”, already in September, expect Euro 22 milion out of total announced Euro 37. 5 milion of Spanish credit, which will enable procurement of ten new DMUs.

-We expect 150 milion dollars from the World Bank, and from the international Railway Bank “Eurofima” we expect Euro 60 million for modernization of the rolling stock. Funds of “Eurofima” would be operational in the first half of the 2008, and they would provide the procurement of per ten shunting locomotives, multisystem locomotives and passenger’s units. We have recently started new negotiations with European Bank for Reconstrucion and Development about credit lines for modernization of diesel and electric locomotives – says Šarančić.

-Owing to this means, with increase of transport incomes of the company itself, by the end of 2008 number of wagons in the traffic, from today’s insufficient 3,700 will approach the figure of approxmately 6.000 cars, as required for satisfaction of economic requests for transportation of goods by rail, and present rolling stock fleet of 220 passenger wagons will be significantly modernized and improved. Beside that, procurement of 10 new multisystem locomotives, in the amount of Euro 35-40 milion, 10 DMUs, and 10 more shunting locomotives (with 12 already procured new shunting locomotives) as well as significant increased number of electric locomotives on Serbian Railways lines to the maximum of 90 on average per day in traffic, suggest significant modernization of Serbian Railways in the next few years and give lots of reasons for optimism.

Šarančić also announced the project of electrification of railway line Pančevo-Vršac. He referred to the incresaed number of projects which were realized in the passenger and freight traffic, which particularly imprived our service, especially emphasizing the introduction of ”Ro-La” trains for the transport of trucks by rail (because of that six tunnels on the railway line Niš-Dimitrovgrad had to be enlarged) and passenger wagons for transport of the disabled persons, according to the European quality standards.