Students and senior citizens in the Czech Republic will continue to benefit from half-price discounts on train and bus tickets, as confirmed by Minister of Transport Martin Kupka. Despite the initial draft of the state budget not including the nearly five billion Czech crowns allocated for reimbursing transport companies for these discounts, the Ministry of Finance will include the amount in the budget.

The decision to maintain the 50% discounts on fares was reached through a coalition agreement, and the budgetary impact of the discounts will be incorporated into the draft of the state budget for 2024, which the government is expected to approve in the coming week, according to Gabriela Krušinová, spokesperson for the Ministry of Finance.

While the Ministry of Finance’s pricing list already accounted for the continuation of the discounts, some voices within the governing coalition have advocated for more focused adjustments to the values, emphasizing the need to consider the social aspect.

Minister Kupka also noted that there was already a significant reduction in discounts last year when they were lowered from 75% to 50%, resulting in savings of at least 1.8 billion Czech crowns for the state.

The discounts on fares for pupils, students, and passengers aged 65 and older were introduced by the government in 2018. Before the COVID-19 pandemic in 2019, the state paid transport companies 5.79 billion Czech crowns to cover these discounts. However, the economic impact of the pandemic led to a decrease of over two billion crowns in this account.

As part of government plans, the Ministry of Transport is expected to save over six billion Czech crowns in subsidies, and the overall budget is slated to be reduced by 16 billion crowns next year. A portion of these savings will come from reducing the funding allocated to regions for the maintenance of second and third-class roads.

Additionally, the Ministry intends to enhance operational efficiency in organizations like the Road and Motorway Directorate and the Railway Administration, eliminate specific tasks and vacant positions, and, in part, reduce the number of officials through layoffs.

While Minister Kupka aims to find additional billions in the State Fund for Transport Infrastructure budget, the Ministry will paradoxically utilize borrowing for these savings, effectively postponing expenses. The Ministry expects that, given the limited resources of the state budget, it will increasingly explore alternative financing sources and pursue partnerships with private companies, such as the public-private partnership (PPP) model used in the construction of the D4 highway. The Ministry is also considering financing through the European Investment Bank, following a transportation model successfully implemented in Poland.

Article by Prague Forum