New transport minister scuppers rail liberalisation plan

The recently installed minister of transport, Antonín Prachař of ANO, has rejected a plan to liberalise more sections of the Czech Republic’s rail network, Lidové noviny reported on Wednesday.

Photo: European Commission

A project to open several routes up to competition drafted by the last, centre-right government has been put on ice indefinitely, the newspaper said. It envisaged the ending of semi-state Czech Railways’ monopoly on 24 long-distance lines by the year 2027.

A spokesperson for the Ministry of Transport said Mr. Prachař disagreed with the timeframe set out by the previous cabinet, adding that nobody was forcing the Czech Republic to liberalise in this field.

Radim Jančura, whose Regiojet rail company is just one part of his Student Agency transport empire, said he was disappointed by the news.

Mr. Jančura hopes to see his distinctive yellow trains featuring plane-style stewards appear on routes other than Prague to Ostrava, where it is currently losing money in a battle for passengers with Czech Railways and another private carrier, Leo Express.

The result of the competition on that major line in the last two years has been relatively low ticket prices and better services than those found elsewhere in the country’s dense rail network.

Mr. Jančura, who actively backed Minister Prachař’s ANO party ahead of October’s elections, said the latter needed to understand that liberalisation was a European trend that led to savings for the state.

By the Student Agency mogul’s reckoning, liberalisation would save one of the four million crowns that the government was now pumping into Czech Railways annually.

Mr. Prachař’s party chief Andrej Babiš had promised to change the system and deliver savings, said Jančura; if it now rejects rail liberalisation, ANO will lose the businessman’s backing.

Antonín Prachař, photo: CTK

The minister has refused to reveal why he is derailing plans to boost rail competition. However, officials said liberalisation would have to wait until a level playing field was created for all carriers.

One element of that would involve the sell-off of station buildings, which are now owned by Czech Railways, to the Railway Infrastructure Administration.

All carriers would then pay rates to the state agency depending on station usage, and Czech Railways would not have to bear the cost of operating stations on its own.

Transport Ministry officials have also said that a new independent rail regulator would have to be put in place prior to broader liberalisation, though they did not indicate when that might happen.

The majority of European states only allow competition on regional rail routes, leaving long-distance passenger trains under a monopoly national carrier. The European Union does not require the liberalisation of the latter type of route.