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Bakala buys strategic railway junction in Belarus

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One of the companies of Czech businessman Zdeněk Bakala will control a significant portion of trade between former Soviet Union countries and central Europe. OKD, Doprava has bought a 90% stake in the railway terminal Belterminal in Brest, Belarus. Bakala also holds a majority share in Economia, the publisher of Hospodářské noviny.

There is different information on the purchase price – Belarus’s news agency BelTA said the transaction was worth USD 2.5 million, while other sources mentioned as much as USD 5 million. The buyer does not want to comment on the price. “I cannot talk about the price at the moment,” said OKD, Doprava logistics director and board member Bohumil Bonczek.

“The purchase price of the terminal was low,” said a source with local knowledge who wished not to be named. Until now, there has been minimal traffic in the terminal – Bakala will have to invest a lot and bring shipping companies to the area. The Belarusian side received higher bids, but opted for Czechs in the end, the source said.

“The purchase of the terminal comes as part of our strategic vision in logistics. We count on more investments, for we want to build up a modern terminal,” said Bonczek. The company believes it would make transport between the east and west easier. “We will cooperate with the Belorussian railways, too,” Bonczek added.

Besides rails, the company Belterminal with roughly 50 employees also comprises handling equipment, office buildings and warehouses.

The Brest railway terminal is situated in a strategic locality on the border with Poland, and dispatches all cargo heading to the European Union via Belarus. Containers with raw materials from Russia and other eastern countries are transported on a broad-gauge railway to Belterminal and reloaded here to be able to continue across the European continent. Imported goods from western Europe move in the opposite direction.

“This strategic investment provides OKD, Doprava with exclusive control over one of the key East-West-East corridors for cargo transport from Russia and Asia and Europe,” OKD, Doprava CEO, Attila Boros, said. The acquisition also includes the first privatisation of a Belarusian railway line.

The terminal in the hands of a private investor could lure more companies interested in forwarding goods from the Far East to Europe by rail via Belarus instead of using the Suez canal waterway.

Belarus is now searching for buyers from all over Europe for its companies. The country presented 70 possible projects at the investment forum in London and many of them attracted great attention.

“We want to sell over five hundred companies, virtually all big firms, in three years,” Belarusian chargé d’affaires Vasily Markovich told HN some time ago. Czech businesses are welcome, he added.

Belarus offers opportunities in the energy sector, for instance. At the London investment forum, the Czech-Slovak investment holding company CTY Group reached agreement with the Belorussian energy ministry and the state-run concern Belenergo on cooperation in construction of thermal and hydroelectric power stations and on supplies of high-pressure piping.

OKD, Doprava, fully controlled by New World Resources Transportation, is the second largest railway transport provider in the Czech Republic behind Czech Railways. OKD, Doprava generated CZK 3.3 billion in sales and made gross earnings of CZK 254 million last year. Bakala’s investment company RPG acquired the transport firm as part of the mining company OKD.

The group is one of the largest central and eastern European transporters of coal and other commodities; Bakala wants to reinforce his cargo transport business further to become a major competitor to national transport providers. Last week, he completed the purchase of Viamont Cargo from the construction and transport holding company Viamont and included it in his group.

Translated with permission by the Prague Daily Monitor.

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