Italian ‘no stops’ order upsets ÖBB

Struggling Federal Railways (ÖBB) is facing more trouble as Italian officials want to ban its trains from stopping in all but their final destinations.Italy’s railway regulator URSF announced yesterday (Thurs) the EuroCity trains of ÖBB and Germany’s Deutsche Bahn (DB) will not be allowed to halt at any stations expect their final stops in the southern European country as of this Sunday.URSF argued that the activities of ÖBB and DB may harm the competitiveness of Italy’s regional railway operators.ÖBB said today it will fight the decision in court, claiming it violated all European regulations.The news from Italy comes just weeks after Viennese state prosecutors raided ÖBB offices and the apartments of former managers over bribery suspicions.Juridical authorities in Austria were asked by their Hungarian colleagues to assist in investigating ÖBB’s acquisition of Hungarian railway firm MAV Cargo two years ago. The Austrian firm took over MAV Cargo from the Hungarian government for around 400 million Euros.Hungarian prosecutors suspect that the more than seven million Euros transferred by ÖBB to lobbying agency Geuronet could be slush money. The Budapest-based one-man firm reportedly has excellent connections to the political elite in the Eastern European (EE) country which became a member of the European Union (EU) six years ago.ÖBB’s supervisory board has vehemently denied reports in the Austrian media suggesting they discussed bribing decision-makers in Hungary to accomplish the takeover of MAV Cargo. Magazine profil claimed it got hold of a tape recording compromising controversial statements by members of the ÖBB’s supervisory board during a meeting in 2008.Investigations have shown recently that the 7.1 million Euros ÖBB paid Geuronet were still stashed on the lobbying company’s account, a revelation which some commentators said may end the slush money accusations.MAV Cargo has been integrated in the ÖBB group. It is now managed by its cargo subsidiary Rail Cargo Austria (RCA).RCA, which was once ÖBB’s cash cow, has suffered dramatic losses during recent years. ÖBB CEO Christian Kern sent shockwaves through the Austrian press by announcing last month he had decided to remove RCA co-chiefs Günther Riessland and Friedrich Macher from executive power.Kern said the managers will not be sacked but continue working for ÖBB. The ÖBB chief reportedly tried to avoid paying millions in financial compensation to Riessland and Macher they would have been eligible to receive in the case of an early dismissal.ÖBB recently raised fees it charged RCA’s business partners by around 30 per cent in a bid to get the subsidiary firm’s finances in order.Forst Holz Papier, a pressure group formed by businesses in the Austrian wood-processing and paper-making industries, reacted by warning it will assign hauliers to transport an additional five tons of cargo of wood and wood products it initially planned to transfer via railways. The group stressed this amount equals 200,000 lorries.Kern revealed RCA may suffer losses of 300 million Euros this year, significantly more than initially expected by analysts and ÖBB itself.The former Verbund manager, who took over as ÖBB head half a year ago, criticised companies over their considerations to get hauliers to transfer their products.He told the Kurier newspaper earlier this week: “Our (cargo) transport offer is an ecological one. This implies that a certain price needs to be paid. What’s wrong in this country that this ecological form of transportation isn’t accepted? Why are firms not ready to cough up five per cent more?”Kern warned ÖBB was not in the position to slash its rates “until all the vehicles crash against a wall”.The company chief said he was, despite difficulties on all fronts, optimistic about getting ÖBB back on track in the coming years. “Investments in railroad operations are on the rise everywhere in the world. A global renaissance of railways is happening,” he said.Kern made clear ÖBB’s debts, which currently range around 14 billion Euros, will not decline before 2025.The ÖBB boss is reportedly poised to reform the firm’s employment structure as its staff currently retire at an average age of 52. The partly state-owned company has around 42,000 employees.