World Report

Rapid internal rail lines and connections to neighbouring countries will play an essential role in economic development

By next year, OSE will have competed the replacement of its fleet with new rolling stock.

ransport networks are of vital importance to achieving the balanced growth across Greece that the government is aiming for. One of the main priorities is the creation of a modern rail network. “The role of the railway in the country’s economy is essential,” says Nicholas Baltas (INTERVIEW), Chairman of the state-owned Hellenic Railways Organisation (OSE).

The objective is to develop the railway as a significant means of transporting passengers and goods by minimising travel time between the big cities and metropolitan centres where the economic activity and the population are concentrated.

“Every effort will be made using EU, national and private funds, to create a modern, fast and environmentally friendly railway network that contributes to the overall development of the country,” says Michael Liapis, Minister of Transport.

One of the main targets is the completion of a high-speed network linking Patras, Athens and Thessaloniki. With extensions running to the Former Yugoslav Republic of Macedonia (FYROM) and the Bulgarian and Turkish borders, this will constitute the most important Greek railway axis for international rail operations. The total cost of the project will amount to 5.5 billion euros (£3.8 billion).

Currently, it takes four and a half hours to travel by train from Athens to Thessaloniki. This will be reduced to three and a quarter hours by 2011, and further shortened thereafter with the use of tilting trains. The upgrade of the Thessaloniki-Kipi line, part of the intended Thessaloniki-Istanbul road and rail corridor between Greece and Turkey, will be completed by 2009.

Nicholas Baltas
Chairman of OSE

“Prospects for an increase in our market share appear to be particularly good”

Michael Liapis
Minister of Transport

“Every effort will be made to create a fast, environmentally friendly network”

In addition to developing internal rail links between the main economic regions of Greece, the aim is to establish rapid connections to all neighbouring countries, and links in intermodal transport chains with Southeastern Europe and the Eastern Mediterranean. “High quality connections will promote passenger and freight transport with Turkey and with Bulgaria in the years to come,” says Mr Liapis.

Professor Baltas says the technological and managerial improvements needed to make OSE an efficient, competitive provider of transport services are being accelerated. The process of replacing the fleet with modern rolling stock, begun in 1997, will be completed with final deliveries next year at a total cost of 860 million euros (£600 million).
OSE’s market share in the transport sector is relatively small, but is expected to increase. Excluding sea transports, its share in passenger transport is nine million people, or about 10 percent of the total. Its share in the transport of goods is just 2 percent, but is expected to increase.

“A positive trend is already being registered in international freight transport, mainly in respect of container traffic, where volumes have increased more than threefold,” says Professor Baltas. “Taking into account that the country has enjoyed the highest GDP growth rate among the countries of the eurozone over the last few years, and that the political environment in southeastern Europe is getting more and more stable, prospects for an increase of the railway’s share appear to be particularly good – especially after 2007, thanks to the ongoing investment projects.”

The transformation of OSE into a holding company, with subsidiaries running the lines, is a priority for the government. Greece is obliged to restructure its rail network in line with EU directives on railway development and modernisation. Another major challenge will be to reduce OSE’s budget deficit and its dependence on state subsidies.

OSE is interested in joint ventures and strategic partnerships and there are a number of openings for UK know-how and technology. “UK expertise in new rail technologies, particularly related to signalling, electrification and rolling stock upgrading, would be very welcome,” says Professor Baltas.