COMMENT: The railway men

By bne IntelliNews May 16, 2014

James de Candole of Candole Partners -


In the same week that NWR, Zdenek Bakala’s coal mining business, announced that it would run out of money in nine months, the Czech press revealed that the ailing business had paid ANO 2011’s Pavel Telicka and his firm BXL some €2.2m in the period 2006-2013 for unspecified consulting services.

bne once described Zdenek Bakala as the man who pulled off one of the deals of the decade by doing “a leveraged buyout of OKD, the hard coal miner, for a reputed €400m in November 2004, then set about stripping out assets worth around €2bn, and then flogging off the rest to an eager market that valued the firm at €4.5bn”. 

People might wonder what value Telicka, a man who has spent his entire career either working as a public official or lobbying them, can add to a coal mining firm owned by an highly accomplished asset stripper like Bakala. 

The answer is railways, or to be more precise, rail freight. Since 2005, Telicka has served as the European Coordinator of the North Sea Baltic Corridor project. This ambitious EU-funded endeavour aims to build an uninterrupted rail transport corridor connecting the ports on the Gulf of Finland of Helsinki and Tallinn, passing south through the three Baltic States and North Eastern Poland to Warsaw. From there it follows the East-West corridor to Lodz, Poznan and Berlin, continuing to the ports on the North Sea coast. 

Telicka's central role in the project, paid by the European taxpayer, is perhaps the most important reason why he was hired by Bakala. Bakala’s business interests include lots of locomotives pulling lot of wagons full of coke and iron ore backwards and forwards across Central Europe, from the German and Polish North Sea ports all the way to Adriatic. 

Bakala's AWT Group (AWT stands for Advanced World Transport – Bakala likes to think big when naming his companies. See here) describes itself as the "largest private provider of rail freight services in Europe, transporting commodities such as coal and steel, and components for the automobile industry". For example, AWT transports over half a million tons of iron ore from Bosnia-Herzegovina to ArcelorMittal's Central European steel plants in the Czech Republic and Poland.

AWT has 5,000 freight wagons and over 150 locomotives. In the Czech Republic, it owns the Ostrava-Paskov terminal and over 400 kilometres of railway track. AWT’s assets outside the Czech Republic include the Brest Belterminal on Belarus’s western border with Poland. 

You get the point: Zdenek Bakala has a keen business interest in railways. And since 2006, Telicka has been Europe’s railway "point man" for one of the EU’s most important regional projects in rail transport infrastructure. 

A common interest in railways, then, is the reason why Bakala was so happy to have Pavel Telicka on board. We should believe Telicka when he denies that he was paid over €2.2m by NWR to lobby for Bakala: he was paid by NWR and by the European taxpayer to help build railways – and to help Bakala take over the world. 

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