Slovenian Railways have signed a contract to purchase 30 new multi-system electric engines for its freight arm from the German unit of the French multinational Alstom. The biggest modernisation of rolling stock in 20 years, the deal is valued at €152 million, excluding VAT.

Speaking at the signing on 21 March, Slovenian Railways director-general Dušan Mes said the deal will fulfil one of the two strategic goals of the partnership between the Slovenian Railways and its Czech strategic partner, EP Logistics International.

Their joint venture, SŽ EP Logistika, is currently one of the most successful freight transport groups in this part of Europe, according to Mes.

One of the goals of the partnership is to update the rolling stock. The purchase of 30 Alsom Traxx 3 MS engines will mean that 38 Alstom engines aged between 45 and 50 years will be retired.

On average 15 to 20 of these engines are undergoing repairs at any time. They are past their expected life span and are not adapted to the current volume of freight, Mes said.

Slovenian Railways and Alstom sign agreement for the purchase of 30 freight transport engines. Photo: Anže Malovrh/STA

Keeping just the existing rolling stock would make Slovenian freight transport uncompetitive, especially with the opening of the Koper-Divača railway. It would be unable to keep the market share or expand in foreign markets, which is the second goal of the Slovenian-Czech partnership.

Mes said that results of expansion to Croatia, Italy, Austria and Serbia would be announced soon.

SŽ EP Logistika wants to fulfil its strategic goals by the end of 2026. It is planning investments totalling over €300 million by then, a figure that includes the purchase of the engines.

Mes said that the negotiations were complex but that the price of the engines was lowered by around €15 million. The price per engine without VAT is just under €5 million.

The engines, which will be faster, and more powerful, energy efficient, and environmentally friendly, will be supplied in the next 24 months, in time for the opening of the new track to the Koper port.

Part of the investment will be covered from the recapitalisation of the joint venture SŽ EP Logistika and the rest with a loan.

In the coming years the railways operator is expected to overhaul 12 diesel engines and purchase 750 new freight cars. With the growth of freight volumes in mind, the company might have to consider purchasing more engines in the future.