Czech Transportation Profile 2012

Czech Transportation Profile

Transportation is well developed. Prague, with several railways and highways radiating from it, is the hub of the country's transportation system. It has a subway system and an international airport. Railways and highways link all of the major cities and provide links to bordering countries.

There are nearly 35,000 miles (56,000 kilometers) of highways and 5,900 miles (9,500 kilometers) of railways. The Elbe, Oder, and Vltava rivers are used extensively for inland shipping. The country has several international airports, including ones serving Prague, Brno, and Ostrava.

Czech Republic Freight Transport Report   2011 

As we have progressed through 2011 it has become clear that the Czech freight transport sector is being supported by moderate GDP growth. We are predicting that the economy will expand by 2.4% this year, with the export sector providing the main source of dynamism despite a rather mixed outlook for the Eurozone, where we expect monetary tightening to be the order of the day. Our medium term forecast is for average Czech GDP growth of 3.4%, which we believe places the Republic ahead of a number of its Eastern European peers, and certainly ahead of the southern European economies most beset by debt and fiscal problems.

We have raised our growth forecast for a number of transport modes, and specifically for road and rail haulage. In both cases new data releases have shown growth was lower last year than we had estimated. As a result, after the steep recession of 2009 and what we now know to be a weaker than expected 2010, we believe there is a greater likelihood of a cyclical 'bounce back' in 2011, not least because of base year effects.

• Headline Industry Data 2011 air freight tonnage is forecast to grow 1.6%, following growth of 2.0% in 2010.
• 2011 rail freight volume is forecast to grow 6% to 87.9mn tonnes, following a growth of 8.1% in 2010.
• 2011 road freight tonnage is forecast to grow 6% to 377.3mn tonnes, following contraction of 3.8% in 2010.
• 2011 total trade growth in real terms is forecast at 11.3%

Key Industry Trends

Transport Unions Lead One-Day Strike - The Czech Republic's main public transport unions called a 24- hour stoppage on June 16, in protest at the centre-right government's plans for a series of fiscal austerity measures. Although the stoppage successfully brought the main suburban transport services to a stop, commentators believed there were few clear winners, and that it did not necessarily signal a period of rising militancy.

Electronic Road Toll Revenue Up 30% - The electronic toll system operated for buses and trucks experienced a 30% increase in revenue in the first half of 2011 to reach CZK4bn (US$239.59mn). However, it now appears that plans to extend electronic tolls to trucks using secondary Class II and Class III have been shelved.

CSA Plans to Sell Subsidiaries-- CSA, the Czech national airline, was to sell three of its subsidiaries, hoping to raise a total of CZK1.2bn (US$69.5mn) The divestments were proposed as part of a reorganisation under which the subsidiaries would be directly held by Cesky Aeroholding, an umbrella company which would also own CSA itself and Letiste Praha, the operator of Prague airport. The creation of Cesky Aeroholding was awaiting approval by the Czech and European Union competition regulators.

Key Risks to Outlook

We see two main downside risks to our Czech freight forecasts. The first is external and concerns the renewed possibility of a sharp downturn in the Eurozone economies following potential further trouble with high debt and fragile banking systems in southern Europe including Spain, Italy, Portugal and Greece. The second is internal. Although the centre-right coalition government has boosted the country's attractiveness to foreign investors with its fiscal reforms, these face opposition and the coalition itself is prone to internal quarrelling. The danger is that disagreements could force early elections, before 2012, and that this could increase political risk factors