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Macedonia Blocks Private Sector Role in Rail

March 31, 2012

Transport Minster Mile Janakieski rules out calls for private-sector involvement in the rail company, saying the government will modernise the creaking system on its own.

Sinisa Jakov Marusic, Balkan Insight, 29.03.2012
Skopje’s railway station | Photo by: Balkan Insight

Macedonia’s Transport Minister has dismissed calls for the part-privatisation of the rail network, MZ, saying it would result in mass layoffs.

“MZ would be forced to let hundreds of workers go if that happened,” Minister Janakieski said.

The minister was responding to calls by the Macedonian Transport Association for  liberalization of the country’s transport sector in general in order to bring in better quality and lower prices.

“We need fast, cost-effective and modern railway transport. Only liberalization that follows European experiences will improve conditions,” Ivan Petrovski, head of the Association, said recently.

Slovenian Railways and the Czech firm Loco Trans have already expressed interest in taking part in Macedonia’s railway business, which is worth 30 million euros a year.

The Transport Ministry instead announced it will amend the Railway Systems Law to ban the entry of foreign operators until the country joins the EU.

The government said it would meantime invest more in the railway company to modernize its systems and make it more competitive on the regional market.

The proposed change to the law comes at a time when strikes by MZ workers demanding overdue payments have been announced.

Meanwhile, this month MZ increased railway tickets by around 50 per cent, angering commuters who travel daily from the provinces to the capital, Skopje. The company said it would use these money for modernization.

The government last year announced it will buy new rolling stock and repair lines as part of a bid to upgrade its decayed network, which has been starved of investment for the past 30 years. It also says it will launch a major overhaul of Skopje’s main railway station.

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