Hospodárske noviny, 23.9.2014


Statement of attorney Jana Martinková for Hospodárske noviny on the issue of the broad-gauge railway , used on 23 September 2014 in HN’s “Transportation and logistics” section in Article “The broad-gauge railway will connect us with China”.

1) When did you personally start to take interest in the broad-gauge railway project and what had led you to it? Please try to clarify this for us – what is your position in it today?
Some three years ago my cooperation with fellow attorneys from Austria concerning provision of legal services in area of transportation, railways and such led me to it. Today I could identify myself as an active observer.

2) How did the project develop – from the beginning up until now? Try to sum up what has most been changing over the time.
The idea has been in place for at least 14 years, through which time the conditions, parameters, requirements, aims have been changing, as well as lobbying interests, however so far it has not undergone any substantial development. Probably mainly due to its high financial requirements and in the beginning also due to the negative standpoint of provinces of South Austria and Burgenland, later due to the ambiguous position of Ukraine and Slovakia. In that time also an alternative project of conducting the broad-gauge route through Poland to Germany, later through Hungary to Austria. The project started to proceed some six years ago, first studies were executed (the Slovak Railway Institute for Research and Development and the Project institute of the Russian railways, later the Roland Berger prefeasibility Study). In 2008, Breitspur Planungsgesellschaft m.b.H was founded, jointly owned by Russia, Ukraine, Slovak republic and Austria. In July 2013 the directors of the Austrian, Russian, Slovak and Ukrainian railways signed a memorandum of understanding regarding the prolonging of the broad-gauge railway with binding promise of contribution in amount of €20 million, which despite being due have not yet been paid up in full amount. The funds should be used to finance a new feasibility study the first part of which shall determine the corridor, the exact route, placing of the terminals etc. The second, economical/legal part shall focus on financial and entrepreneurial model and subsequent plan for profit and financing.

3) Is the broad-gauge railway project the single biggest in Slovakia, or can it be compared to something else? Why do you think there is potential in it for the future and on the other side, what are the risks here that will need to be addressed?
From the international point of view and the profit for the Slovak labor and construction market (ca. 8.000 new jobs), this certainly is the biggest project in Slovakia. This project is a chance to avoid economical isolation, as the Russian and Asian market which, considering its size that could help our economy to grow and our production to diversify,  would find itself an alternate route to Europe, which would diversify various transportation risks. Of course, the project also has its risks, mainly the potential deviation from the national and economical interests, not to mention the transfer of part of operations in area of loading of goods to Austria, or the ecological or transportation burden on Slovakia. Also, the interests of Slovakia on at least two terminals on our territory must be settled and enforced, including Čierna nad Tisou (where the loading facility for bulk material must be kept, also preserving the jobs). Without them, the broad-gauge railway makes only temporary sense for Slovakia.

4) There were suspicions in the broad-gauge railway tender, suggesting that we cannot really effectively use the multi-billion investment, as opposed to other countries. How do you feel about this – is this a problem in our country, or where do you see certain risks?
I did not entirely understand this question, I don’t have an information that the broad-gauge railway should be financed with use of the European funds, would you kindly elaborate on it?
As far as I know, from the publicly available sources, the tender for technical part of the feasibility study of the broad-gauge railway (commenced in August 2013) has been tainted by allegations of lack of transparency of the selection process, some financial and personal connections of competing firms and other indirectly involved subjects, allegations of conflicts of interests or impossibility of offered price. But the lawsuit has not been ended yet, as the Federal administrative court has yet to rule on the complaint (it will either dismiss the complaint, or rule on invalidity of the tender or a part thereof and will return the matter to the public procurer for further proceedings). It is difficult to predict the outcome, as the Austrian legislature is much more liberal in this regard than in Slovakia. The Austrian tender therefore allows for an impression that also a more developed democracy does not automatically safeguard objectivity and transparency. The biggest risk is always the high amount concerned in the contract that does allure one to misconduct, also perhaps not always active approach of the interested parties and lack of interest of the media.

5) Public procurement is presently still in progress for a feasibility study of execution of prolonging of the broad-gauge railway from Košice to Vienna. What will come next and what should we get ready for, from your point of view?
Also public procuring procedure for execution of the financial and legal part of the feasibility study has yet to come. This part should present conclusions mainly from the point of view of the economic benefits for the respective countries, the extent of necessary investments and stipulation of the financial contribution for the respective countries etc. Based on this, negotiations should take place, not only among countries having stake in Breitspur Plannungsgesellschaft byut also with the ASEAN countries and China, eventually South Korea or Japan, which will also profit from this project. Therefore it would not be very professional to presently assess the future effectiveness of the project for Slovakia and the contribution of Slovakia on the financing of the project, whether it will cost six or nine billion euros. However, sheer criteria determining the feasibility of the project like the minimum yearly volume of transport of 25 million tons  will definitely not be sufficient from the point of view of expediency of the project for Slovakia.

6) Do you think it is possible for the project to be finished in the foreseeable future, or is it going to be a matter of months or years to come? What else would you like to point out?
Considering the present development, either from the point of view of the new political aspects or the present suppression of broader macroeconomic indicators by individual economic interests,  I don’t think the project will be finished in the foreseeable future (as it is planned until 2026), neither the beginning of it realization. Should, however, this project be approached the same way it has been up until now, it will either never be executed or will not bring the declared benefits.