Czech Republic and Poland to Consider Rail Cargo Operators Merger

The Czech Republic and Poland have agreed to form a task group to explore the feasibility of a possible merger of the state-owned rail cargo operators in both countries.

Czech Transport Ministry spokesman Jakub Ptacniky said that the group plan to merge the Czech Republic's CD Cargo and Poland's PKP Cargo was put together last month.

The possible merger would be in the interest of the rail cargo operators as they both compete for business in the same region of central Europe, according to CD Cargo spokesman Roman Jandik.

In 2009, CD Cargo posted an operating loss of CZK437m ($24m), compared with a CZK303m (16$m) operating profit in 2008, while revenues were CZK13.3bn ($712m) in 2009, down from CZK18.6bn, ($995.8m) with operating debts of around CZK8bn ($428.3m).

PKP Cargo is said to be nearly twice as large as its Czech peer in revenue terms.

The possible valuation of the deal was not disclosed and detailed merger terms have yet to be discussed, according to Dow Jones Newswires.