State to help railways pay debts
The Ministry of Transport has announced plans to help Czech Railways pay its debts by providing a heavy financial injection to cover at least those liabilities that are more than six months overdue. Olga Szantova has the story.
Anybody who has ever taken a train ride in the Czech Republic knows that it's not exactly a pleasant experience. Much of the rolling stock is old, the speed isn't exactly breathtaking, trains tend to arrive late and the cleanliness leaves much, very much to be desired. And yet, trains do get people to work and to school, and the state couldn't possibly do without them. And so, with the threat of bankruptcy proceedings imminent, the Ministry of Transport has decided to take the necessary steps to save the railways from grinding to a standstill.
At the end of May Czech Railways owed its suppliers 2.4 billion crowns in liabilities, which were nearly a year overdue. Most of that money should be going to repair companies, machine works and power suppliers. Since for many of them, the railways are their only client, when they don't pay up, the companies in turn are unable to meet their tax obligations and repeatedly have to ask the government to delay or waive part of the payments they owe.
The only natural solution would be to declare Czech Railways bankrupt, but this is something the government - understandably - is reluctant to agree to. The Ministry of Transport therefore decided to provide a heavy financial injection to cover at least the liabilities which are more than six months overdue.
It would be wrong though to blame only the Czech Railways for the situation. The company itself is owed several billion crowns. Yet there is no doubt that one of the largest state-controlled Czech companies is in bad need of transformation.