Railway in Czech Republic: ?D Looking to Cash in on Station Renovation |
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Railway in Czech Republic: ?D Looking to Cash in on Station Renovation |
2006-08-02 23:31:49 |
| autor: (Source: Prague Post, 19 July 2006) |
After years of struggling unsuccessfully to get out of the red, Czech Railways (?D) is looking to boost revenues and attract more passengers by transforming the country's often dilapidated train stations into upscale shopping malls and business centers.
Upgrading the stations is part of an overall turnaround strategy by ?D, which lost 589 million K? ($26 million) in 2005 and should be around 300 million K? in the red this year. Management believes it will make rail travel more customer-friendly and lead to higher revenues at the ticket stand and at the station.
"There are three priorities that should make train travel more attractive," said Josef Bazala, general director of ?D. "Those are upgrading the trains, improving the quality of services and revitalizing train stations."
?D began launching tenders for the renovation of 60 stations, a project worth tens of billions of crowns, this spring. It will continue going out for bids for the next two years, according to Aleš Ondr?j, a spokesman for the company.
?D initially wanted to approach investors directly but decided to hand oversight of the project to ?D Reality, a real estate subsidiary ?D created in 2004 to handle station renovation.
The 60 locations selected for refurbishment are in major towns and have a daily passenger turnover above 4,000 people. Eugen Be?ka, director of ?D Reality, said the company will lease the stations and the land surrounding them to selected bidders or form joint companies with them. In the latter case, ?D Reality will keep a controlling stake.
After the renovation is complete, the developers will have the option of leasing the outlets themselves to businesses and retailers or bringing in a third party. Either way, ?D will get a percentage of the revenue. So far, around 10 tenders have been completed. Novatyp, the company that won a bid to renovate the Prague-Holešovice station, is set to begin construction later this summer.
?D has also picked an investor to redesign Prague's Main Station. Grandi Stazioni ?eská Republika, a subsidiary of Italy's Grandi Stazioni, will begin the project this summer, transforming the dilapidated site into a modern retail and business center by 2009.
European trend
Transforming train stations into mall-like spaces is a trend throughout Europe. Increasingly they're beginning to resemble airports, with shops, restaurants and lounges, and many observers point to Berlin's new main station, which opened in June, as the example to emulate.
"We'd like to take our inspiration from the Berlin train station," Karel Biskup, business director of Novatyp, the company handling the Prague-Holešovice project, recently said.
And the stations here are, for the most part, in desperate need of a face lift.
"Today, train stations here resemble Asian markets," said Patrik Kotas, an architect working on Prague's Main Station. "They should be turned into shopping malls."
Approximately 600,000 passengers pass through the country by train every day, so ?D has seen the potential in upgrading the stations. In the future, the company is hoping they will start bringing in profit rather than driving operational costs higher.
And there's a good chance this will work, said Tomáš Svátek, a marketing analyst at Factum Invenio. "Shopping malls located at train stations have guaranteed customers in passengers," he said. "Also, train passengers are a clear target for malls at train stations, and they can also use the space in trains or on tickets for advertising particular products." |
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