- According to all the parameters, for "Serbian Railways" year 2006 was successful and we have the reason to be satisfied with our results. We surpassed the plans, while numerous projects and activities, commenced in 2006, give us the right to believe that 2007 will be even better and more successful for the railways. Our transport volume and incomes exceeded the plans; we maintained high level of traffic safety; we completed significant projects of infrastructure modernization and rolling stock provision; we obtained from European Investment Bank and European Bank for Reconstruction and Development 140 EUR loan to be realized in 2007; we continued with the restructuring process and maintained social peace at the enterprise, achieving very successful cooperation

with Serbian Government and the Ministry of Capital  Investment.In fact, the end of this year represents final phase of the toughest restructuring period of Serbian Railways; 2007 will be the year of greater, widespread modernization of our company – said the Director General of "Serbian Railways" Milanko Sarancic, analyzing the year 2006 and announcing the plans for 2007, in his interview for New Year’s edition of  "Pruga".

- In freight transport section we achieved the volume of work 10 percents higher than the last year, and 4 percent more than planed, with the average daily transport volume of 10 million net tone kilometers. Freight transport income was nine billion Dinars, that is 114 million EUR, which is 29 percent more than in 2005, and 18 percent above the plan. Therefore, we continued the tendency of work and income increase, under he average annual rate of more than 20 percents. Only from transit transport we earned approximately 45 million EUR, which is ten percent more than last year. We maintained the existing, and brought new forwarding agents; the number of container trains passing through Serbia is getting higher, and Makis became the most important marshalling yard in the region, which will bring us annually the turnover of three million EUR. We exceeded the revenue plan in passenger transport as well, even though we have had fewer passengers than in 2005. Above all, we maintained transport safety level, in line with financial and technical potentials of the railways, - specified Sarancic.

According to his words, Serbian railways have certain inherited problems regarding undeveloped infrastructure, lack of investments in rolling stock, and inherited financial obligations too. Therefore, every day "Serbian Railways" set aside over 100 thousand Dolars from their own resources, paying off regularly their obligations to foreign partners, although those have been inherited from the past.

Two thousand freight cars

- We are overcoming our inherited problems step by step, - emphasizes Sarancic, continuing:

- “Serbian Railways” have lost 26,5 million EUR due to the insufficient number of wagons and locomotives for the fulfillment of transport needs. But this year we started certain activities, aiming to have two thousand wagons more than today. Thanks to the loan of 60 million EUR, gained from the European Bank for Reconstruction and Development, in 2007 we will provide 1.100 new freight wagons. During 2006, Serbian enterprises repaired and sent back to tracks 435 freight cars, and in the next few months we will take over another 65, while there are 600 freight wagons to be repaired during 2007. Few months ago we announced an international tender for the lease of 400 freight wagons, and so far received the offer for only 149, which shows clearly the problem of freight car procurement in Europe. This will enable us to fulfill almost every request for freight transport, and at the same time the achievement of significantly greater transport volume and incomes as well.

Sarancic emphasizes that in 2006 they procured ten diesel multiple-unit sets and 12 new shunting locomotives from Czech Republic, while three Czech shunting locomotives are to be delivered. That will significantly solve the oil procurement problem, reducing the fuel consumption.

New locomotives and wagons

- In 2007 we should provide another ten diesel multiple-unit sets and 10 shunting locomotives, which would solve the problems we have in shunting traction for a long period of time. In so doing we will reduce fuel expenses, gaining new means for the provision of vehicles. Affording the greater number of traction units on Serbian rails, we will create conditions for better freight and passenger traffic. Besides, Managing Board of the enterprise made a decision to procure 10 multi-system locomotives, which will enable us to operate out of the borders of Serbia. In the first quarter of 2007 we expect 10 electric locomotive to be delivered from Romania and four from Slovakia, - says Director general.

He also revealed that during 2007 they would attempt to find the financial resources for the provision of 40 new electric trains, 10 new shunting locomotives, 10 used railcars, and for the reconstruction of 15 diesel locomotives.

Regarding passenger traffic, Sarancic said that in 2007 Serbian railways would come to the realization of the Spanish credit, 37,5 million EUR worth. The means will be used for the modernization of 20 passenger and ten sleeping coaches operating in international traffic, and for the provision of 10 diesel trains as well, which would be used for suburban and regional service. Beside that, next year we should carry out the great overhaul and modernization of 80 passenger wagons, while at the beginning of 2007 we should have complete the modification of three Z1 passenger coaches for disabled persons, intended for the operation within an international train to Vienna.

European importance of Serbian railways

- Recently we signed a contract with European Investment Bank on the credit of 80 million EUR. The means are intended for the overhaul of the line 93 kilometers long, along Corridor 10, precisely at the section Cele Kula–Stanicenje (railway line Nis-Dimitrovgrad), Batajnica-Golubinci, between Belgrade and Sid, as well as the section Gilje-Cuprija-Paracin, on the main line Belgrade-Nis. Next project is electrification of the only non-electrified section on the entire Corridor 10, 1500 kilometers long, from Nis to Dimitrovgrad, which would eliminate the bottleneck and significantly improve the service on this international mail railway line. Recent signing of the Protocol on the opening of a joint inter-state station in Dimitrovgrad, made passenger service 50 minutes faster, and freight even 140 minutes. Concerning the relations with Europe and surrounding countries, our intention is to declare the requests to obtain joint inter-state stations in all directions on Corridor 10, speeding up significantly our transport. However, we should not forget that for the complete modernization of Corridor 10 through Serbia, we would need another billion EUR, - specified Sarancic, explaining the activities regarding the modernization of railway infrastructure.

He reminded that during 2006, the last kilometer of the line Belgrade-Valjevo has been completed, along with the capital repair of the line Petrovaradin-Cortanovci, finalized thanks to the loan of European Investment Bank, and the reconstruction of 19 bridges on the line Nis-Dimitrovgrad. Among the projects finalized in 2006, there is a renewal of Ostruznica Bridge three million Euros worth, as the first project of National Investment Fund, then opening of the repaired Bogojevo Bridge, connecting Serbia and Croatia. In 2006 "Serbian Railways" adapted and reconstructed numerous railway objects across Serbia: Cacak, Kikinda, Smederevska palanka, Vrsac, Vrnjacka Banja, Mataruska Banja, Ratar etc.

Investing in future

- Aiming to improve transport safety, we will invest five million Euros in the protection of level crossings all over Serbia, since the statistics show that most of the accidents happen exactly there, mostly caused by road vehicles. This year we will finish three level crossings, while a tender has been announced for other three. In 2007 we are planning to protect another 20 crossings. Provision of 124 point-switches expected in 2007 will certainly affect positively traffic safety.

On the occasion of New Year and Christmas holidays, "Serbian Railways" Director General, Milanko Sarancic said to all the employees:

- In 2007 I wish to all the employees and their families good health, happiness, prosperity and the accomplishment of all their wishes and plans. I believe the railway workers are able to recognize all the good things done during past years. Knowing that our employees have experienced all the difficulties, they surely have the reason to be a part of all the good things expecting us in future. I am certain that future will be brighter for the railways and railway workers. We have done a lot of things with a support of the Government and Ministry of Capital Investment. Great projects are coming, serious tasks and plans, with the aim to make Serbian railways one modern, efficient and market oriented business system, as a part of European railway network. We commenced big projects, which should be finalized. Railway workers will know how to respect and appreciate that. Together we will have the opportunity to finish what we have started, and make Serbian railways modern, faster, safer and more beautiful, - concluded Milanko Sarancic, Director General of "Serbian Railways".

STANDARD

- Concern about the standard of railway employees was always at the first place. "Home peace" was one precondition for the realization of all these projects. Previously, the railways obtained social peace mostly due to excellent cooperation with unions, which created quality basis for the work and realization of planed activities. The unions significantly contributed the improvement of standards and work conditions, - emphasized Sarancic.

- Price of man-hour for the salary in January will not be under 60 Dinars. That is 13 percent more than the one in January 2005 – specified Director General and said that negotiations on the new Collective Contract would start in March.

According to his words, in 2006 approximately two thousand employees left the enterprise. As a result, the railways are approaching planned number of employees of about 19.400. Total number of workers has been reduced avoiding successfully any social “shocks”, and on voluntary basis, with the full support of Republic Government. Sarancic announced additional negotiations with the Government, regarding further support for the reduction of the number of employees.

DISCONTENT

Director General highlighted two projects he was dissatisfied with in 2006.

The first one is taking over of certain locomotives from "Koncar" Zagreb. The contract regards modernization and repair of 38 electric locomotives. So far, the repair of 27 locomotives has been finalized.

- The project was contracted several years ago, and its realization was moving very slowly. For its prolonged completion, Serbian railways are loosing jobs on transport market, and incomes at the same time. If "Koncar" does not fulfill the obligations till the end of this month, we will ask for support from European Bank that has financed the project, while "Serbian Railways" are paying it off through annual rates. We have to find a solution together, but "Koncar" will have to accept the expenses for the damage caused to Serbian railways.

Second project that failed in realization was the project of thousand flats for railway workers. What slow it down are administrative problems. In three years “Serbian Railways” provided for the employees nearly 90 flats, mostly financed from solidarity sources, or the program of real estate exchange. In the next 30 days we should give another 48 flats all over Serbia. Afterwards, we expect the project to move faster, since we have got the agreements of municipalities and towns in Serbia in which we own certain real estates.
Presently, about 1500 employees haven’t got their flats. Therefore our intention is to solve this problem in the next two years, - emphasized Sarancic.

PROKOP

- Several months ago we signed a contract with the best bidder – TriGranit from Cyprus, company with the majority of Canadian capital. The contract regards the construction of railway station at Prokop, as one of the biggest investment project in the region. The agreement has predefined creation of two additional contracts, concerning technical details of the project.

"Serbian Railways" fulfilled all their obligations. Currently, TriGranit is working on the agreement with city authorities, in order to obtain better payment conditions. Afterwards, we will have the contracts prepared for signing. That is the reason construction works at Prokop haven’t been commenced yet, in spite of the plans. Moreover, Prokop will be the central railway station in Belgrade for a long period of time, - stated Sarancic.