Maintenance before bankruptcy, railway traffic threatened

Alarming situation in the state-owned railway company, the management is calling for urgent help from the Government. Maintenance of railway rolling stock burdened with numerous problems, possible total work stoppage, Workers threaten a strike, which would lead to a complete suspension of railway traffic in the country

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Tax debt of around four million euros (illustration), Photo: OŽVS
Tax debt of around four million euros (illustration), Photo: OŽVS
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

Maintenance of railway rolling stock (RMO) is in an extremely difficult financial and technological situation, and in the next few weeks there could be a total stoppage of work if the authorities do not react and get this company out of trouble.

This state-owned company is threatened with bankruptcy due to high tax debt and large daily interest on that debt (about four million), inability to pay monthly contributions with net earnings of employees in accordance with the law, re-blocking of accounts by the Revenue and Customs Administration (UPC).

In addition, this state-owned railway company has unpaid claims from Montecargo (about 800.000 euros), an unresolved problem with the transfer of property that is recorded in real estate deeds to the Railway Transport (ŽPCG), the unresolved status of the "Blue Hall" for which a legitimate, legally valid and economic solution needs to be found, the hourly rate which is the lowest in the region (17 euros), the unresolved issue of state aid (deminimus) which has been in the process for months, and the block should be avoided implementation of a development project worth around six million euros financed by EIBA, of which half of the project amount (three million) is a grant.

The alarming situation in this state-owned company was pointed out to "Vijesti" by the deputy president of the board of directors and a minority shareholder. Vladan Gačević.

He said that he and the director of OŽVS Dragana Lukšić regarding this situation, last week they had a meeting with representatives of Montecargo (president of the Board of Directors Miroslav Bajović and executive director Dušanko Dragojevićić), with representatives of Railway Transport - ŽPCG (chairman of the Board of Directors Marco Bertagnoli and executive director Ilinko Pavićević), director of the Directorate for Railways in the Ministry of Capital Investments (MKI) Momcilo Jelic and director of the Railway Administration Denis Lukač.

From last week's meeting
From last week's meetingphoto: Maintenance of railway rolling stock

The employees' union wants higher wages

"I explained to those present that OŽVS is in an extremely difficult financial and technological situation and that this meeting was initiated with the representatives of MKI, Montekargo and ŽPCG as a last hope and a warning that in the next few weeks there could be a total stoppage in the work of OŽVS and to send them a clear message to take this issue seriously and to decide accordingly as soon as possible", said Gačević.

He emphasized at the meeting that the conclusions must be the basis for finding ways and modalities for this company to solve the accumulated problems and that this is the last chance for the management to take action to get the company out of the problem.

"The management of OŽVS has so far tried in every way with various letters and measures to at least partially solve the problems, it has not yet initiated the blocking of Montekargo's account because we hoped that there would be an improvement in Montekargo's operations and a promise that the debt, which they applied for and thought they would receive, would be settled. "In recent days, the Board of Directors of OŽVS has been seriously considering blocking Montekargo's account, even though it is not our goal to endanger the business of that company, but we are simply forced to," Gačević said.

According to him, the employees of OŽVS are asking for a salary increase because they have the lowest salaries in the railway system compared to employees in similar jobs in other railway companies, in which, according to the new collective agreements, the employees start or already receive salaries that will be increased by 30 to 40 percent.

Gačević also pointed out that the representative union in OŽVS has announced a strike, which will lead to the suspension of railway traffic and the blockade of the entire system. Two representative unions represent 190 workers.

"The management of OŽVS has so far increased the price of standard hours, started the process of property translation, but also solving the issue of the "Blue Hall" for the repair of EMV trains, but the main problem remains the high tax debt and interest on the debt, which amount to 30.000 per month. The administration brought a number of other good business ventures, but all of them did not produce sufficiently effective results that would save the company from difficulties. The "Blue Hall" was ceded by the MKI to the ŽPCG for use, free of charge, and thus directly threatened the business of OŽVS. For now, the only solution is to sign a contract on business and technical cooperation", Gačević pointed out.

He said that they still do not have an answer to the request for payment of de-minimis aid from the OŽVS, which is intended for the payment of severance pay and contributions to employees who have exercised their right to a pension, and where the payment deadline was 30/6/2023, and now they are additionally at risk of lawsuits from employees and UPCG. (The request was sent to the Ministry of Finance, and 200.000 is requested for four workers who are due to retire.

Montecargo returned the five million debt

At this meeting, the chairman of the Board of Directors of Montekargo, Brajović, according to Gačević, said that they had in mind the debt claimed by OŽVS and Railway Infrastructure (ŽICG), and that it was not clear what amounts Montekargo had paid since Brajović took over the management of Montekargo, which at that time was in a similar situation as OŽVS today, i.e., facing bankruptcy.

"Brajović told us that in 2021, Montekargo paid 640 thousand euros, and in 2022, 1,06 million, which is 1,7 million in two years, and that Montekargo tried to pay off the inherited debt in full, but failed. Montecargo paid ŽICG 2021 thousand in 693, and 2022 million in 1,17, a total of 3,86 million. That's five million in two years," Gačević stated, adding that Brajović informed them that Montekargo paid more than three million without the help of the state and thus helped ŽICG because their budget was less than their salaries.

Montecargo
photo: Luka Zeković

Gačević said that Brajović said that they are most bothered by the signals coming from the MKI that say Montekargo is privileged, that some say it should be blocked, and that the former Minister of Capital Investments Mladen Bojanic and then director of the Directorate for Railways Dragana Lukšić were explicit that no railway company should be blocked before the minister was informed about it.

"Momcilo Jelić remained of the position that railway companies should not be blocked before the director of the Directorate for Railways and the minister are informed of such a decision," said Gačević.

He said that the conclusion of all the participants of the meeting was that the presented problems are urgent and everyone will contribute in order to resolve the status of the OŽVS as soon as possible, not only currently but also in the future.

"Through this, we appeal to the Government and the Ministry of Interior to make decisions in favor of OŽVS, because otherwise the entire railway traffic in Montenegro will be threatened", pointed out Gačević.

Ministries to help Montecargo repay the rest of the debt

Miroslav Brajović pointed out, as stated by Gačević, that it is necessary for the Ministry of Finance and the MKI to jointly help Montekargo in order to pay off the debt to OŽVS.

"Lukač said that it is necessary to make a cross-section of the situation and informed those present that according to the Business Companies Act they bear responsibility for the costs and that delay complicates the problem, and that it is necessary to see what the management bodies (boards of directors) can solve and submit proposals for solutions to the current situation to the Railway Administration. Lukać also pointed out that he is concerned about the situation that can reflect on traffic safety, starting with the fact that employees have the feeling that they are in a disadvantageous position compared to employees in other companies and are not motivated to work, and the conditions in which they work are not negligible either," Gačević said.

The commissions did not resolve the issue regarding the use of the "Blue Hall"

Marko Bertanjoli pointed out that ŽPCG is aware of the importance of maintenance in the railway system and that they are willing, Gačević says, and as before, to help OŽVS to overcome the most urgent problems in accordance with their possibilities. "He pointed out that as far as the hourly rate is concerned, it has already been increased once this year, and he believes that perhaps the Ministry or the Railway Administration could make a decision and subsidize a part of the hourly rate amount for OŽVS. With that move, they would not only help OŽVS, but also ŽPCG and Montekargo", stated Gačević.

According to him, Bertagnoli reiterated that it is necessary to involve the Ministry of Capital Investments and the Railway Administration in the issue of the "Blue Hall" and to hire an external expert to determine the price that ŽPCG would pay in the future, because the commissions that have so far been composed of members of both companies that worked on the issue of the hall have not proposed a solution.

"Bertagnoli pointed out that it is necessary to take urgent measures to solve the problem of maintenance in order to avoid a strike by employees and thereby prevent possible problems that would arise for ŽPCG during the peak of the tourist season," Gačević said.

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