Some 6,000 workers will have to leave Serbia’s state railway company Zeleznice Srbije within next five years, and around 2,000 in 2016 alone, as part of a comprehensive reform process at the company, Serbia’s deputy prime minister and minister of construction, transport and infrastructure Zorana Mihajlovic told the Kopaonik Business Forum on March 9.

The restructuring of Zeleznice Srbije is required under the precautionary €1.2bn three-year stand-by arrangement (SBA) with the International Monetary Fund (IMF) approved in February 2015. The IMF has criticised Belgrade’s slow progress in restructuring Zeleznice Srbije as well as Electric Power Company of Serbia (EPS) and gas company Srbijagas. This is mainly due to the government’s fear of losing support if it accelerates the process of downsizing their workforces. Prime minister Aleksandar Vucic is expected to have a stronger mandate to reform the companies after early elections on April 24.

Mihajlovic said that the reform of Zeleznice Srbije is one of the government’s priorities which is why the company has been reconstructed into four subsidiaries: Srbija kargo, Srbija voz, Infrastruktura Zeleznice Srbije and Zelenznice Srbije a.d., with the aim of making the Serbian rail system capable and functional under new market conditions.

“Downsizing of the workforce is ahead for Zeleznice Srbije, and all four its subsidiaries have adopted their workforce systematisation created based on their real needs,” Mihajlovic said.

She added that the reforms go ahead in cooperation with the World Bank (WB), but that reforms are not something that can be completed overnight.

“Reforms go in line with investments and the current value of investment projects in railway infrastructure is around €1.5bn,” she said, adding that in 2015 120km of railways were modernised.

At end-2014, Zeleznice Srbije had slightly over 17,000 workers.