IN THE FIELD OF RAILWAY TRANSPORT THE BASIC ASSIGNMENT OF COMMERCIALIZATION AND PRIVATIZATION IS AN IMPROVEMENT OF ITS BUSINESS AND TECHNOLOGICAL EFFICIENCY, MAKING POSSIBLE THE CAPITAL INVESTMENT IN THE RAILWAY BY DOMESTIC AND FOREIGN INVESTORS CONCERNED, IN ORDER TO ESTABLISH CONDITIONS FOR ITS FURTHER DEVELOPMENT. IN DOING THIS, THE RESTRUCTURING AND COMMERCIALIZATION SHOULD PRECEDE THE PRIVATIZATION. THE PASSENGER AND FREIGHT TRANSPORTS SHOULD BE COMMERCIAL ACTIVITIES AND THEIR TARIFFS SHOULD ENABLE PROFITABLE OPERATIONS, I.E. THEY SHOULD COVER COSTS AND ENSURE ADEQUATE PROFIT. THE SUBURBAN AND URBAN PASSENGER SERVICES SHOULD CONTINUE TO BE CARRIED OUT AT PRICES BELOW COSTS AND FOR THIS PURPOSE A GOVERNMENT FINANCIAL SUPPORT (SUBSIDIES) IS REQUIRED (PSO). THESE SERVICES, WHICH WOULD CONTINUE TO BE OF A "SOCIAL" CHARACTER, SHOULD BE CARRIED OUT ON THE BASIS OF A CONTRACT BETWEEN THE RAILWAY AND THE STATE WHICH WOULD SPECIFY TARGETS, AUTHORITIES, RESPONSIBILITIES AND FIXING OF TARIFFS.

THE PRIVATIZATION OF RAILWAY ENTERPRISES IS A COMPLEX AND LONG-TERM PROCESS. THE CHANGING OF THE OWNERSHIP STRUCTURE OF PUBLIC RAILWAY ENTERPRISES CAN TAKE PLACE ONLY BASED ON THE FOUNDER'S I.E. THE REPUBLICAN GOVERNMENT'S AGREEMENT. THE TRANSFORMATION PROGRAMME MUST DEFINE VALUES AND STRUCTURE OF THE TOTAL CAPITAL, TARGETS THAT HAVE TO BE ACHIEVED BY OWNERSHIP CHANGES, FORM IN WHICH THE ENTERPRISE IS TO BE TRANSFORMED, METHOD OF SOLVING THE PROBLEM OF STAFF. IN VIEW OF THE SPECIFIC CHARACTER OF RAILWAY SYSTEM AND PROPORTIONALLY LONG PERIOD OF PRIVATIZATION, FIRST CONDITIONS SHOULD BE ESTABLISHED FOR A FUTURE STRENGTHENING OF RAILWAY ENTERPRISE SEGMENTS TO BECOME PROFITABLE AND OF INTEREST FOR PRIVATE INVESTORS. THIS ASSUMES THE SEPARATION OF INFRASTRUCTURE WHICH WOULD REMAIN THE STATE'S PROPERTY, FOR THE ACCOUNTS OF WHICH THE STATE AS AN OWNER WOULD BE RESPONSIBLE, AND A COMMERCIAL PART WHICH COULD PARTLY REMAIN THE STATE'S OWNERSHIP, WHILE THE REMAINING PART WOULD BE SUBJECTED TO THE OWNERSHIP TRANSFORMATION PROCESS. FOR THE ACCOUNT OF THIS PART OF THE ENTERPRISE, THE STATE WOULD NOT BE RESPONSIBLE, BUT THE MANAGEMENT OF THE RAILWAY ENTERPRISE.

RESTRUCTURING OF THE RTE "BEOGRAD" WILL BE CARRIED OUT IN SEVERAL PHASES. THE FIRST PHASE WHICH IS UNDERWAY, ASSUMES THE FOLLOWING CHANGES TO BE MADE IN COMPLIANCE WITH THE DECISION OF THE GOVERNMENT OF THE REPUBLIC OF SERBIA:

PUBLIC ENTERPRISE "RAILWAY OF SERBIA" SHALL CARRY OUT ACTIVITIES WITHIN THE TWO SEPARATE ORGANIZATIONAL PARTS ENTITLED WITH SPECIFIED AUTHORIZATION FOR LEGAL AFFAIRS, SPECIAL WAY OF CALCULATION OF THE BUSINESS RESULTS AND SPECIAL SUB-ACCOUNT AS FOLLOWS:

ORGANIZATIONAL PART FOR MANAGING THE PUBLIC RAILWAY INFRASTRUCTURE AND ORGANIZATION AND REGULATION OF RAILWAY TRAFFIC, AND ORGANIZATIONAL PART FOR THE PUBLIC FREIGHT AND PASSENGER TRANSPORT AND MAINTENANCE OF RAILWAY ROLLING STOCK.

RTE "BEOGRAD", AFTER THE ENACTION OF THE LAW ON RAILWAY IN 1991, HAS FOUNDED 12 INTERRELATED ENTERPRISES TO BE IN ONE COMPANY WITH THE NAME: RAILWAY MEDICAL CENTER - RTE "BEOGRAD".

THE TOTAL VALUE OF THESE ENTERPRISES (ACCORDING TO THE CAPITAL EVALUATION VERIFIED BY THE AGENCY FOR CAPITAL VALUE ASSESSMENT) IS 53.7 MILLION EUR. THE LIST OF ENTERPRISES IN GIVEN IN TABLE 9/1, NOTING THAT THE AUDITING OF THE CAPITAL EVALUATION, FOR BOTH THE DAUGHTER COMPANIES AND FOR RTE "BEOGRAD" BY THE AUDITING AGENCY IS UNDERWAY.

IN THE INITIAL STAGE OF RAILWAY PRIVATIZATION, ALL DAUGHTER COMPANIES DEALING WITH THE ACTIVITIES OTHER THAN TRANSPORT WILL APPEAR IN THE MARKET. THIS IS A NECESSARY REFORM STEP MADE BY MOST TRANSITION COUNTRIES (POLAND, SLOVAKIA, ESTONIA ETC.). THE REVENUE COLLECTED THROUGH THIS ACTION, WILL, BESIDE THE COMMERCIALIZATION OF RAILWAY PROPERTY, BE THE BASIS FOR FINANCING THE REFORM.

ONE OF THE TARGETS SET OUT BY THE BUSINESS PLAN IS SEPARATION FROM THE ENTERPRISE OF ALSO OTHER ORGANIZATIONAL PARTS, APART FROM THE EXISTING DEPENDENT COMPANIES, THAT ARE NOT CARRYING OUT THE CORE ACTIVITIES.

THE PREPARATION OF BUSINESS PLANS OF DAUGHTER COMPANIES IS UNDER WAY, WHICH SHOULD HELP IN GIVING AN ANSWER TO THE QUESTION WHICH ENTERPRISE SHOULD BE PRIVATIZED, AND WHICH SHOULD BE RESTRUCTURED BASED ON AN ADEQUATE CONTRACT RELATION WITH THE RTE