A Tale of Two Railways: Czech Railways Takes on Debt While Poland Invests in Emission-Free Future

Czech Railways recently signed a loan agreement with the European Investment Bank (EIB) for approximately EUR 300 million to modernize its fleet. In contrast, PKP Intercity, Poland’s national long-distance rail operator, is utilizing EU funds to invest in new, emission-free locomotives and enhancements to passenger comfort. This divergence in funding strategies raises questions about long-term sustainability and competitiveness in the region's railway market.

Czech Railways’ Modernization Plans

On October 30, 2024, Czech Railways finalized the loan agreement to purchase 180 new passenger cars and 20 electric locomotives, as reported by RAILTARGET. Additionally, the company plans to retrofit 219 existing wagons and locomotives with the European Rail Traffic Management System (ERTMS). According to the Czech national carrier, this loan represents a continuation of its collaboration with the EIB to modernize its infrastructure and rolling stock. However, the burden of loan repayments may pose challenges for Czech Railways as it navigates the increasingly competitive rail transport landscape in neighboring countries.

PKP Intercity’s Strategic Investments

Simultaneously, on the same day, PKP Intercity signed a contract with the Centre for EU Transport Projects (CUPT) to access funds from Poland's PLN 2 billion (around EUR 497 million) National Renewal Plan. This agreement will enable PKP Intercity to acquire 56 emission-free locomotives and modernize 248 passenger carriages, significantly enhancing passenger comfort and service quality. Notably, all investments will be sourced from Polish railway companies, including PESA, NEWAG, and H.Ciegielski.

While the Czech government restricts EU funding to infrastructure projects and does not allocate funds for rolling stock, Poland clearly has a contrasting approach. The Polish government has effectively made use of EU post-COVID funding to substantially renew its railway fleet without the encumbrance of debt, allowing PKP Intercity to improve its operational efficiency and environmental impact significantly.

Competitive Landscape: Czech vs. Polish Railways

As a result of these contrasting strategies, Czech Railways finds itself burdened with loan repayments, potentially hindering its competitiveness in a liberalized market. The competitive advantage currently lies with PKP Intercity, which is set to benefit from its proactive investment strategy. As PKP Intercity moves towards a greener future with its investments, Czech Railways will need to navigate its debt commitments while seeking innovative solutions to maintain its competitive edge.

The negotiations with the European Commission concerning funding in Poland are managed by CUPT, which has a dedicated team focusing on all transport modes since the country’s EU accession. This agency’s close ties with the government and the Ministry of Infrastructure enable more effective resource allocation and project prioritization, aligning with both political and economic goals.

PKP Intercity’s Commitment to Environmental Sustainability

Emission-free locomotives are not the only sustainable initiative PKP Intercity is actively pursuing. As we have previously informed, PKP Intercity has introduced a new feature that allows travelers to offset their CO₂ emissions when purchasing tickets. Available through the mobile app and e-IC 2.0 system, the feature enables passengers to make voluntary contributions toward eco-friendly projects. According to the company, these funds will support initiatives such as forest planting, species protection, and investments in renewable energy.

The contributions made by passengers are specifically designated for environmental purposes and cannot be allocated to fossil fuel-related activities. Travelers can choose to donate amounts of PLN 2, 3, or 5 (approximately EUR 0.47, 0.70, or 1.17), or enter a custom amount. This initiative aligns with the broader corporate social responsibility efforts within the transport sector, joining other providers like LOT Polish Airlines and Flixbus in promoting sustainable practices.

Source: PKP Intercity; České Drahy; RAILTARGET