Swiss Railways agrees temporary truce in merger battle

The Swiss Federal Railways has agreed to set up a joint project organisation to look at possible co-operation the BLS Lötschberg Railway. The move comes after the federal operator spent months trying to get BLS to agree to a merger.

The Swiss Federal Railways has agreed to set up a joint project organisation to look at possible co-operation with one of Switzerland’s main private rail companies, the BLS Lötschberg Railway. The move comes after the federal operator spent months trying to get BLS to agree to a merger.

A joint statement by the two companies said the new organisation would examine all possibilities, with the long-term aim of strengthening public transport in Switzerland and boosting the economies of the Berne region and western Switzerland.

The new organisation will be led by the chief executive of the Federal Railways, Benedikt Weibel, and the head of the BLS, Martin Tromp. Suggestions for future co-operation models are to be worked out this year.

The statement added that liberalisation in European rail transport was leading to rapid structural changes. It said the joint project aimed to seek effective and cost-efficient rail services and the transfer of goods from road to rail.

Pressure had been mounting over the past few weeks on BLS to merge with the Federal Railways.

The chairman of the board of the Federal Railways, Thierry Lalive d’Epinay, called for a merger in November and spoke of top-level negotiations on the issue.

BLS is one of the most significant private railways in Switzerland. As a standard gauge railway, it is an important link in the rail connections between Northern Europe and Italy, as well as between the Swiss capital, Berne, and major European cities.

The Federal Railways have been arguing in favour of a merger because of increasing competition from the much larger railways of Germany, France and Italy.

Goods rail traffic is one of the main areas where the Federal Railways see competition from the BLS.

On Wednesday, the Federal Railways signed a contract with the Italian railways to found a joint rail goods company called Cargo SI, to be based in Milan. This will be operational from January 1, 2001, at the latest.

For its part, BLS wants to gain market share and new partners for its new rail cargo company, BLS Cargo. It already co-operates closely with German Railways (DB).

Last month, a spokesman for the Federal Railways, Reto Kormann, said that up to SFr50 million in savings could be made annually, if a merger were to go ahead.

He added that savings were not the only argument in favour of a merger. New Alpine tunnels at Lötschberg and Gotthard would be in the same hands, there would be no competition between the two, and goods traffic could be sent on one or other route, as conditions required.