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Govt Adopts Legislation to Overhaul Railway Sector (adds)

Ljubljana, 14 October (STA) - The government endorsed on Thursday a bill on railway transport and bill on the railways operator Slovenske zeleznice, radically changing the railway sector.

Plans for restructuring of Slovenske zeleznice involve the establishment of holding company Holding Slovenske zeleznice which will combine three core divisions of the operator: infrastructure, passenger transport and freight transport.

"We believe this will make business more transparent, while the railways will be better prepared for future challenges," Transport Ministry Patrick Vlacic told the press after the cabinet session.

The new legislation also brings some changes to the investment policy. Construction will from now on be carried out by a state-owned company - either a new one or by the state-owned engineering company DDC.

The company will be in charge of all state investments in railways, as the infrastructure will be owned by the state and not the infrastructure company. Otherwise, state investments would be treated as illegal state aid to companies.

The government has not decided yet on the role of DDC, as Vlacic believes the company itself needs to be reformed. There are three options: DDC could be sold off, scrapped or specialised for railway investments or all state investments, the minister explained.

Asked why the agency for the management of public railway investments would not take over these responsibilities, Vlacic said that the agency was understaffed.

A decision on the fate of DDC should be known soon, the minister asserted. The working group preparing proposals has already held its first meeting.

All upgrades on the existing infrastructure will be carried out by companies selected through public calls to tender, while renovation and maintenance work will be carried out by Slovenske zeleznice. The government has decided for the move to disburden Slovenske zeleznice.

Under the existing system, the railway operator was responsible for both construction and upgrades, but the agency was in fact in charge of upgrades and maintenance due to the drawing of cohesion funds.

According to Vlacic, the bill on railway transport is also necessary to harmonise the Slovenian legislation with EU laws.

The European Commission reprimanded Slovenia in June over its failure to implement basic EU railway legislation.

Vlacic pointed out that so far the state had not been investing in the railway infrastructure. However, the incumbent government endorsed a bill in spring allocating EUR 108m a year for railway infrastructure (both for new facilities and maintenance work).

He said the state would have to provide these funds for quite a few years to catch up for the past. The national railway scheme has been implemented only to some 30%, he added.

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