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We’ve Set Out on a Road that Leads to a Holding

During the next five years, the companies integrated into ČD Group will realise the ČD 2017 transformation programme, which is focused mainly on increasing effectiveness and competitiveness in the areas of passenger transport, freight transport and station administration. The programme’s centrepiece is the creation of a holding model, which should have a positive effect in the form of the group’s size and resources…

Vyrazili jsme na cestu, která vede k holdinguMay the best man win! This sentence is usually declared before a key bout. In the case of ČD, its sense is in the contest of competing on the railway transport market, which is increasingly opening up to competition. The national carrier has all the prerequisites to maintain its privileged position in regional and long-distance transport – provided it behaves like a customer-oriented company and implements measures leading to greater profitability.

Many curative steps have been taken at ČD during the last three years within the Vision 2012 transformation programme, including renewing the company’s rolling stock and acquiring additional sources of financing. Now, this programme’s successor comes to the fore – the ČD 2017 programme, which sets even more ambitious goals, mainly the creation of a holding structure within the companies belonging to ČD Group.

Why we want a holding, or size matters

The key question is: What will a holding bring, and is it worth the costs to create it? “We must realise that today, although ČD Group exists, it does not meet the requirements of synergy and a common strategy. Yet the fundamentals of a holding will yield an effect not only for the large companies like ČD and ČD Cargo, but also for the smaller subsidiaries,” says Design Office Director Martina Mannová, who coordinates the ČD 2017 programme. “Our main assets are the size of the group and the resources which it provides. Even the small companies will suddenly have a diametrically different position on the market if they’re part of a large concern. Another factor in favour of a holding consists in the savings achieved in the form of shared services. Certain activities will be centrally directed but will be performed by the subsidiaries themselves. Others will be performed for the entire ČD Group. Typical examples are central purchasing, marketing, IT and investments, but also accounting facilities,” explains Martina Mannová.

Measures must lead to profit

The business activities of the future holding structure will rest on three main pillars: passenger transport, freight transport and administration of stations and buildings. This model is conditioned on the creation of the two new subsidiaries Osobní doprava (Passenger Transport) and Stanice a servis (Stations and Service). Projects leading to their creation are already underway. In the case of Osobní doprava, these involve a set of operational and economic measures leading toward securing its profitability. The creation of Stanice a servis entails resolving the proprietary relationships between ČD and the Railway Infrastructure Administration (SŽDC) with emphasis on land belonging to ČD which it objectively cannot use, for example land under railway infrastructure. The development of freight transport, that is the company ČD Cargo, should focus more on pro-customer policies, integration into European structures, as well as territorial expansion to railway business activities in neighbouring countries such as Slovakia.

In the case of grouping the existing and future subsidiaries within ČD Group, the programme is set up in such a way so that all prerequisites will be met for launching the holding arrangement. With respect to the frequently discussed possibility of a holding consisting of ČD Group and SŽDC, here the decision rests solely with the state, or rather the government. However, thanks to the ČD 2017 programme – which also encompasses the implementation of concern principles – ČD Group will also be prepared for this eventuality.

VÁCLAV RUBEŠ

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