Document of the World Bank Table of Contents

Labor Productivity

3. 
   Labor productivity remains very low in Bosnian railways, suggesting the need for further staff reductions. The two railway companies (ZFBH and ZRS) are overstaffed —as of 2008, ZRS has 3,519 employees, of which 2,082 are in the infrastructure department with the remainder in the operations department, while ZFBH has 4,084 employees, of which 1,904 are in infrastructure—levels that have remained broadly unchanged since 2004. The average of traffic units per employee is only 178,482 for FBH, considerably lower than many countries in South East Europe, with the exception of Albania—and markedly below the EU average of 683,260 (see Table 4). However, this represents an improvement over the labor productivity reported in the 2005 study,¹⁵ which noted productivity of 105,000 for ZFBH and 59,000 for ZRS—reflecting the growth in traffic. In addition, as the next section reveals, staff costs make up a substantial portion of total operating costs, and therefore are a key element in any attempt to improve the financial performance of the railways and move towards financial viability.
   

4. 
   There is no clear indication of a clear commitment to address the overstaffing issue in the medium-term. For example, in the Business Plan 2009-2011, ZRS is projecting that operations department employees will decline from 1,437 in 2009 to 1,390 in 2011, while infrastructure department employees are projects to rise from 2,082 in 2009 to 2,123 in 2011. ZFBH was planning a three (3) percent reduction in staff each year from 2006¹⁶, but this has not been implemented yet. A 2007 report¹⁷ has underlined a number of issues with overall staffing levels: in the case of both ZFBH and ZRS, the analysis of traffic volume indicates a strong productivity problem, which requires internal repositioning of employees and encouraging natural outflow, as well as increasing flexibility and revising working hours. The analysis suggests a need to adopt a long-term strategy for dealing with the productivity problem, to be implemented in defined stages.
   

5. 
   Infrastructure maintenance remains problematic due to inadequate equipment. ZFBH are responsible for maintaining 601 km of main railway lines (out of which 441 km are electrified and 68 km are double track line). ZRS is responsible for maintaining 416 km of main railway lines (out of which 330 km are electrified and 24 km are double track line section of the Corridor Vc Line). Vehicles and equipment for infrastructure maintenance owned by the two railways can only perform relatively small work projects (unscheduled repairs in case of emergency). All larger projects required are contracted out by bidding. Specialized vehicles for railway infrastructure maintenance are maintained in Workshop Blazuj (owned by ZFBH) or in a commercial workshop. At present, some of the necessary equipment to maintain the railway vehicles in line with the specifications is missing.