Tuesday, July 20, 2010

Greece is to Hellenic Railways as San Francisco is to Muni

Analysts estimate the total [debt of Hellenic Railroads, backed by the Greek government,] to be around $33.6 billion, a sum that would add another 11 percentage points to Greece’s current debt level of about 120 percent of gross domestic product. ...

Some have argued that Hellenic Railways should shut down the majority of its routes, especially in the mountainous Peloponnese region where trains manned by drivers being paid as much as $130,000 a year frequently run empty. ...

In the latest annual figures available, Hellenic Railways reported a loss of more than $1 billion in 2008, on sales of about $253 million. ...

According to an analysis by [former Hellenic Railways CEO John] Mourmouris, for Hellenic Railways to just break even, it would need to increase passenger traffic by a factor of 10, an outcome that seems unlikely. Greece has a well-developed road network, a relatively short distance separates its main cities and the railway’s shabby reputation makes it an unpopular travel option for most Greeks. ...

[T]he average salary of a rail employee is over $78,000. Employees benefited from politically inspired pay increases over the last decade. Between 2000 and 2009, the cost of the company’s payroll soared by 50 percent even as overall personnel decreased by 30 percent.
--Landon Thomas Jr., NYT, on more railway employee salaries gone amok

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