CZ/SK verze

České dráhy (Czech Railways) are changing its director, the timid Nebeský will be replaced by brave Bednárik

České dráhy (Czech Railways) are changing its director, the timid Nebeský will be replaced by brave Bednárik
photo: Archives/Ivan Bednárik and Vladimír Nebeský
27 / 11 / 2020

The current director of České Dráhy (ČD), Václav Nebeský, is ending as the head of this biggest Czech railway company. There are several possible reasons for his dismiss. These include, for example, failure to cope with the economic impact of the COVID-19 pandemic. However, a change in strategy before the European Commission in an antitrust case could have had a much more fundamental effect. Possible step of the national carrier into leniency program could have led to the full confession of České dráhy. There are billions at stake that ČD could have paid if found guilty of anticompetition operations. According to information from the media, Václav Nebeský could be under pressures from other key stakeholders in this matter.It is no longer a secret that the current head of ČD will be replaced by the Chairman of the Board of Directors of ČD Cargo, a daughter company of ČD, Mr. Ivan Bednárik.

Nebeský’s career within the national carrier has been really rocketed. He started as a train dispatcher and ends up as a general director.From 1996 to 2000, Václav Nebeský worked for the railway as a train dispatcher. Subsequently, he worked as a station and line technologist and system specialist for ČD. In 2019, he held the position of Political Deputy Minister of Regional Development, where he was responsible for the development of IT services. He was then appointed head of the České dráhy.

His appointment to the head of the national carrier to the position as a CEO and Chairman of the Board of Directors of České dráhy raised many questions in the Czech Republic. One of the members of the Czech parliament, Jakub Michálek (Pirates), described the election of Nebeský as a scandalous form of bribe, because Nebeský's wife Olga headed the section for coordination of European subsidies at the Ministry of Regional Development and was also responsible for preparing the Czech Republic's response to the European Commission's draft audit report in the case of Prime Minister Andrej Babiš. There were strong opinions on the conflict of interests. After a wave of criticism, Nebeský's wife resigned in the Ministry.

Nebeský himself was criticized for his insufficient managerial experience in leading as large company as České dráhy are. Another critic of Nebeský was Stanislav Blaha, a member of the Czech right-wing ODS party. He criticized the fact that Nebeský had led teams of a maximum of 19 people in the past. The original condition for obtaining the position of a member of the Board of Directors was experience in managing 300 or more employees which Nebeský did not met. This condition was suddenly relaxed during the tender procedure. However, criticism also came from abroad. The prestigious rating agency Moody's stated in June 2019 that the management of ČD is under political influence.

Nebeský did not help the whole situation when he took further startling steps after taking office. He dismissed several long-term key managers. For example, Hana Dluhošová, a long-time investment director of ČD or the fleet head Rostislav Novák, who managed the department for 16 years. Lenka Voplatková, the director of external relations, also ended up in the management of ČD. As the last the board of directors dismissed IT head Radoslav Pospíšil. It also decided to appoint two department directors for several vacant positions - the project office department and the employee care department. There has been speculation that the dismissal of key managers did cause an extreme accident rate for ČD trains.

Nebeský was under a lot of pressure due to the long-term investigation of ČD by the European Commission. Under his leadership, the company's position in this matter has not improved, on the contrary. The first case that was investigated is the so-called predatory practices. At that time, private carriers Leo Express and RegioJet complained to the European Commission that České dráhy offered tickets on the Prague-Ostrava route at a dumped price, i.e. at a price that was below operating costs, thus preventing competition from operating on this lucrative route. This is a long-standing dispute.

Another case appeared in 2016. At that time, the European Commission carried out a dawn raid in the premises of České dráhy. Among other things, e-mails were to be found between ČD manager Radek Dvořák and ÖBB Austrian State Railways manager Silvia Kaupa, in which Dvořák was to ask ÖBB not to sell used recliner wagons to the competitor of České dráhy, company RegioJet. The European Commission has thus initiated further proceedings with České dráhy, for possible breach of competition laws. However, cartel inspections are a relatively common issue on the market.

In 2020, someone from the České dráhy management gave the journalists from the SeznamZprá webpage the full text of these e-mails and other ČD internal information. This makes this case not a usual case of anti-cartel complaint. This unlawful behaviour possibly from the side of ČD’s management fundamentally damaged the position of České dráhy in the whole case. There is no information that the management of the state-owned company searches internally for the person who forwarded the e-mails.

Another turning point came in November. On November 2, 2020, Česká webpage quoted Pavel Kysilka, Chairman of the Supervisory Board of České dráhy, who told the media that the company's board of directors should "take a clear procedural strategy". At the same timeČeské dráhy has had a clear procedure strategy for ten years. This strategy was simple: they did deny their guilt.

The management of České dráhy, led by Nebeský, had to be aware of the risks that would result from such a change in the procedural strategy. Confession before the European Commission would become binding on our courts in the event of national disputes in possible private competition case. We can speculate about possible domestic lawsuits from companies Leo Express and RegioJet who were supposed to be damaged by the conduct of České dráhy. Possible  impact on the economy of České dráhy from these lawsuits could be significantly higher than the proceedings before the European Commission itself.

A strong, courageous manager should fight for the interests of České dráhy before the European Commission. According to information from the Czech media, however, Nebeský proceeded very timidly and even considered confessing. Was this behavior the reason why Nebeský ended up in the office? It is very likely. The new boss, dragon Bednárik, has already proven several times that he does not lack courage and can fight persistently for the interests of a state-owned enterprise.