Serbian Railways – “The Start of our Future”

Belgrade, 16/04/2015

Serbian Railways is, by asset base, one the largest public sector utilities in Serbia

• Role of the company in the Serbian rail sector:– Railway infrastructure management– Rail passenger transport– Rail freight transport

• Network: 3809km, 283 km double track lines, 1286 km electrified

• Rolling stock (average number in operation): 110 locos 16 EMU; 19 DMU

3570 freight cars; 123 passenger coaches

• Asset base*: 2.075.367.301,61EUR• Turnover*: EUR 218 mil

(Our own income EUR108,1 mil. Subventions 109,9 mil. EUR)

• Headcount*: 17.078• Scope of operation*:

– transported 10.8 milions tons of goods– transported 17.4 milions of passengers– 21.6 milions train km (passenger trains 15.7 milions, freight trains 5.9 milions)– 7.1 bilions gtkm (passenger trains 1.6 bilions, freight trains 5.5 bilions)* 2014 data

Whilst performance improvements are required, we are faced with numerous operational challenges

• Our company has experienced considerable reduction in the volume of work over the last 20 years.

• Following the accumulation of years of maintenance backlog, there has been a significant decrease in the maximum speed on the network.

• As a result of low availability of rolling stock and train delays, the quality of our services declined substantially.

• Productivity of our labour and rolling stock is assessed as weak, when compared against the neighbouring peers.

• As of 31/12/2014, the average age of our staff is 48 years old, with 26 years of average professional experience.

We have embarked upon a major programme of operational and financial improvements

• We wish to evolve into a company, which provides efficient and competitive service to customers at an acceptable level of financial cost.

• The comprehensive programme of improvements, that is currentlly being developed, is led by the Ministry of Construction, Transport and Infrastructure, and supported by the International Financing Institutions.

• The programme involves a series of steps, designed to (1) improve performance of the rail sector as a whole, (2) improve performance of Serbian Railways, and (3) enable the Ministry to comply with the EU legislation. The steps include:– review of institutional arrangements;– articulation of operational and financial improvements in the

performance of Serbian Railways;– “on-the-ground” implementation of the necessary improvements.

Our work under the programme primarily focuses on the improvements that we need to achieve

• Steps completed so far include the following:– Operational roadmap for the reform programme;– Allocation of assets between the rail companies;– Allocation of staff between the rail companies;– Proposal for the allocation of liabilities;– Draft labour restructuring plan.– Communication plan in support of the reform programme.

• Our short term plans involve detailed development of corporate plans for the rail companies and the supporting performance improvement initiatives, in compliance with the objectives set out for the Serbian rail sector.

Thank you for your attention.