Three ex-Yugoslav republics will next week form a joint railway company, aiming to win back some of the cargo market in central Europe lost during the ethnic wars of the 1990s. In a rare display of close business cooperation, Slovenia, Croatia and Serbia will set up the joint venture company in Belgrade on Sept. 8, Croatia's transport ministry told Reuters.

"The aim is to act jointly on the market in order to ensure fast transport of cargo on European Corridor X," a ministry spokeswoman told Reuters. An official of Serbia's Infrastructure Ministry said Montenegro and Macedonia also wanted to join in.

The corridor, which links Germany and Austria with Turkey, has largely bypassed the former Yugoslavia in the last 20 years, going through Hungary and Romania instead.

Serbia's Infrastructure Minister Milutin Mrkonjic said earlier this year only 1,000 trains currently use Corridor X.

"If we could attract another 2,000 trains, Serbia, Croatia and Slovenia would significantly boost their foreign currency revenues," he said.

The joint railway is the biggest project involving state firms in the former Yugoslavia since the wars ended in 1995. All countries of the region want to join the European Union, and Brussels has told them it wants to see improved regional links in place.

The aim is to cut transport time from the Slovenian capital Ljubljana to Istanbul to 35 hours from the current 60, officials said last month when they struck an initial agreement.

The seat of the new company will be in Slovenia, the only Yugoslav republic that joined the European Union, in 2004.

To upgrade its railway system, which is in poor shape after 10 years of Balkan wars, 1999 NATO bombing and mismanagement during the tenure of former President Slobodan Milosevic, Serbia last year sought an $800 million loan from Russia. (Reuters)