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The latest event in the lengthy and ongoing discussion on a tie-up between Slovenia Railways, port operator Luka Koper and freight company Intereuropa felt like the last chance saloon. Prime Minister Borut Pahor seemed to acknowledge as much, saying before the January conference that: "If we don't have the understanding of the managements, supervisory boards and the unions, the idea will probably be hard to realise by means of coercion."

For...

The arguments for the tie-up are clear and oft-stated. Hartmut Mehdorn, who was hired last April to advise the indebted Slovenske Železnice (Slovenian Railways) on restructuring, believes that the companies will lose their markets unless they tie up. He anticipates many benefits from the holding, the immediate one being EUR 20m a year and later EUR 40m a year plus EUR 50m in annual cost savings.

The project would first entail an immediate restructuring of the railways operator, supply of additional liquidity to Intereuropa and improving the operation of Luka Koper (Port of Koper) . The next step would be to create an integrated company, which would first need endorsement from the government.

All three units would be 100 percent owned by the Slovenian logistics holding, with the government as the majority owner that would get to keep at least a 51 percent stake. Aside from a shareholders board, oversight would be secured through the supervisory board; the executive board would comprise directors of the three units. Monopoly would be prevented by a regulator to be appointed by the government.

...and against

But Mehdorn's ideas have been received coolly, with many stakeholders claiming that the plan would merely create a handy back door for his former employer Deutche Bahn, Europe's biggest rail operator, to gain control of the lucrative Koper port.

Predictably, January's conference raised several concerns and questions about the planned tie-up. It also showed that the opinions of the three companies that would form the holding have not changed much since the last face-to-face discussion.

While general manager of Slovenske Železnice Goran Brankovič believes it would make sense to start moving towards a holding, the managers of Luka Koper and Intereuropa remain doubtful that it would bring benefits to their companies.

Intereuropa chairman Ernest Gortan and Luka Koper chairman Gregor Veselko said that while they still opposed the idea in principle, they were yet to examine the study about the economic and legal aspects of the tie-up since the documents were delivered to them on the day of the conference.

Decision time

One of the authors of the study, economist Janez Šušteršič, says that several questions must still be answered before a decision can be taken on whether to push ahead with the creation of the holding.

Šušteršič argues these questions include how to provide for competition in the event that a holding is formed, how to convince the management of the two smaller partners to enter the project, and how to settle relations between the partners.

And then there are those who believe the holding should be widened to include Adria Airways, Ljubljana airport and Splošna plovba, the shipping company.

At the end of the January conference, it did not seem that the concerned parties were much closer to an answer - even though, ironically, all are in agreement that a decision needs to be made quickly. It seems likely that the government will make the final call at some point in the Spring. But which stance is likely to prevail is as difficult to predict as ever.