ÖBB holding to take control of passenger and freight arms in major restructuring

AUSTRIA: The coalition government has agreed the biggest restructuring of the state-owned ÖBB group in more than two decades, which is expected to cut costs by around €80m a year.

The governing coalition of the conservative ÖVP, the social democratic SPÖ and the liberal NEOS agreed a plan to restructure the ÖBB group on October 22. This would turn the current holding company from a strategic parent into an operational business, taking direct control of its passenger and freight operating units. Stripping out duplicated management is expected to cut costs, as ÖBB’s debt and its call on the state budget have been rising amid deepening losses at its freight arm Rail Cargo Group.

Passenger operator ÖBB-Personenverkehr AG and freight operator Rail Cargo Austria AG are to be converted from joint stock companies (AGs) into limited liability companies (GmbHs) whose managers would have to follow instructions from the parent company. Infrastructure manager ÖBB-Infrastruktur AG will remain a joint stock company. The changes are to be implemented through an amendment to the Federal Railways Act, which currently lays down in detail how the ÖBB group must be organised.

The traction supplier ÖBB-Produktion GmbH and maintenance unit ÖBB-Technische Services GmbH, which currently sit under the passenger and freight companies, are to become direct subsidiaries of ÖBB-Holding AG. A Chief Operating Officer will join the holding’s management board to run production across the group, joining the existing CEO and CFO.

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