ATHENS – Thirteen former executives of Greece’s money-bleeding Hellenic Railways (OSE,) one of the companies the coalition government led by New Democracy Prime Minister Antonis Samaras is trying to sell off, have been charged with stealing state funds and being involved in decisions that undercut the company’s interests. Not charged, however, was former New Democracy Transport Minister Michalis Liapis, who was implicated in the scandal but protected under the statute of limitations even though evidence was sent to Parliament.
Prosecutors conducted an investigation based on accusations against the former high-ranking OSE executives for actions or omissions in terms of procedures followed for procurements and in meeting contractual obligations, including attempts to change specifications for the purchase of new electrically-powered trains at a cost of $3.93 billion.
The program was approved unanimously five years ago by a Parliamentary committee but the tenders were delayed in changing the specifications and lower the top speed of the trains. That was rejected by the committee, leading OSE’s board to then decide to buy 50 diesel-powered engines for freight cars, with a top speed of 120 kilometres per hour, despite the committee’s insistence on mixed-use engines with a maximum speed of 180 km per hour.
That led to the procedure being frozen and with no new cars being purchased, costing OSE huge sums in potential profits as a result, the Athens News Agency reported. The second part of the case against the 13 accused relates to the OSE management’s tolerance of a contractor’s delay in the delivery of a comprehensive Information Technology system for handling passenger transport. The final part relates to OSE’s lease of eight Siemens Desiro electric trains for 16 months for 1 million euros ($1.23 million) per month, when OSE could have acquired the trains without paying anything. There is also evidence in the court file suggesting that OSE management failed to impose fines on a contractor who delayed the delivery of an integrated information system for handling public transport.
The trains had been given to OSE without charge from January 2004 until April 2007 as part of a penalty clause for failure to promptly deliver new rolling stock by the Siemens-Hellenic Shipyards consortium which owed 8.3 million euros ($10.2 million) when the lease agreement was signed. The prosecutor said the eight trains could almost have been bought for that amount. The case has been forwarded to an examining magistrate, who is expected to summon the 13 accused to testify.
TRAINOSE, an operational arm of OSE, showed a profit 15 million euros ($18.4 million) last year because 11 billion euros of the $13.5 billion of debt was passed on to the state. TRAINOSE implemented an overhauled timetable and reduced wages to slash its deficit from 187 million euros ($229.8 million) in 2010 to just 33 million ($40.5 million) last year before going into the black.
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