Pressure mounts for merger between Swiss Federal Railways and Berne operator

One of Switzerland's main private railways, the BLS Lötschberg Railway, is facing growing pressure to merge with the Swiss Federal Railways. Media reports say BLS is adamantly opposed to any deal, which would undermine its independence.

One of Switzerland’s main private railways, the BLS Lötschberg Railway, is facing growing pressure to merge with the Swiss Federal Railways. Media reports say BLS is adamantly opposed to any deal, which would undermine its independence.

The idea of a merger was first mooted last November, when the chairman of the Federal Railways, Thierry Lalive d’Epinay, called for the two organisations to join forces, in the face of growing competition from Switzerland’s neighbours.

It is reported that Lalive d’Epinay has now given BLS an ultimatum: either agree to a merger or prepare to face all-out competition from the Federal Railways.

A news conference is scheduled for Friday in Berne to give details of talks on possible co-operation between the two railways.

BLS is one of the most significant private railways in Switzerland. As a standard gauge railway, it is an important link in the rail connections between Northern Europe and Italy, as well as between the Swiss capital, Berne, and major European cities.

The major shareholder in BLS is canton Berne, which has so far confirmed only that talks have been taking place on closer co-operation. But media reports say BLS has rejected outright any suggestion of a merger.

The Federal Railways has been arguing in favour of a merger because of increasing competition from the much larger railways of Germany, France and Italy.

The Federal Railways wants to avoid competition for goods traffic from BLS.

On Wednesday, the Federal Railways signed a contract with the Italian railways to found a joint rail goods company called Cargo SI, to be based in Milan. This will be operational from January 1, 2001, at the latest.

For its part, BLS wants to gain market share and new partners for its new rail cargo company, BLS Cargo. It already co-operates closely with German Railways (DB).

Last month, a spokesman for the Federal Railways, Reto Kormann, said that up to SFr50 million in savings could be made annually, if a merger were to go ahead.

He added that savings were not the only argument in favour of a merger. New Alpine tunnels at Lötschberg and Gotthard would be in the same hands, there would be no competition between the two, and goods traffic could be sent on one or other route, as conditions required.