Russian Railways is considering buying a controlling stake

Babayev said that Russian Railways also had bid for Poland’s PKP Cargo, Europe’s No 2 rail freight carrier. PKP Cargo is also of interest to the Czechs who want to merge Czech rail company CD Cargo with PKP Cargo in the most ambitious central European railway deal ever. Earlier this March, the Slovak government approved a plan to revamp and partially sell state railways as it seeks to raise revenues and cut subsidies to the ailing industry. According to the Transportation Minister for the Slovak Cabinet Jan Figel, the government will sell 66 percent of the cargo unit, ZSSK Cargo. The companies, which also include an operator of the rail track and a passenger unit, have accumulated losses of 353 million euros (US$491 million) and need to repay the state 236 million euros in loans, according to the ministry document. Last year remained marked by the impact of the economic crisis, unfavorable conditions in the transport market of the Slovak Republic, increased competition, and economic problems, the company says in its 2010 Annual Report. In its auditors’ report, Ernst & Young said that “the future of the company depends on the implementation of new measures directly linked to the new revitalization program for the railways sector passed by the Slovak government as well as the introduction of a strategic investor.”