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October 31, 2020

GFR to sue the state for compensations if CFR Marfa privatisation fails

The deadline regarding the payment of the amount worth EUR 170 million by the buyer interested in taking over 51 percent stake in CFR Marfa remains October 14, with the Ministry of Transports to release after this date more information on the completion of the privatization procedure, Transport Minister Ramona Manescu said yesterday, quoted by Mediafax. She also said she was preparing to hold talks on this topic with Prime Minister Victor Ponta. In addition, Manescu pointed out that the draft law on extending the privatization deadline was promoted by State Secretary Cristian Ghibu, but it was not included in the Government’s meeting agenda on Wednesday, therefore “its promotion was not possible.” Ramona Manescu stressed that the state “cannot afford to make suppositions and speculations.” Businessman Gruia Stoica, the owner of GFR (Grup Feroviar Roman), warns that the privatisation contract of CFR Marfa does provides no firm deadline for the payment in full and the completion of the transaction, only the mention that this must happen after the approval of the Competition Council, Agerpres informs. “Under the privatisation contract of CFR Marfa which I signed, I must pay the money after the approval issued by the Competition Council. There is no other firm deadline in the privatisation contract regarding the completion of the transaction. I do not know why the 60-day deadline appeared in the Government Decision. The seller (the Ministry of Transport) should have correlated the Government Decision with the privatisation contract,” Stoica mentioned on Wednesday evening. He warned that, if Monday, October 14, the Ministry of Transport will announce the failure of the privatisation contract, GFR will sue the Romanian state in court.
“I will talk with the lawyers and we will go (to court) in order to recover our losses. It is not my mistake that the seller did not correlate the Government Decision with the privatisation contract,” the businessman stated. According to Stoica, there was no transaction ever in Romania or in the European Union in which the buyer paid the money before the approval of the competition authority.
“European legislation clearly states: no transfer is to be made without the approval of the Competition Council, and only then we will make the payment. It never happened, in the history of Romania or the European Union, for the buyer to pay the money without the approval of the competition authority. I have the money, but in order to pay the seller must fulfil its obligations resulting from the contract. What should I do, give them EUR 200 M now and who will pay the bank commissions if the Competition Council rejects the transaction five months from now?” Stoica added.
Asked about how big the risk is for the privatisation process to be declared as failed, Stoica answered that he does not know.
“If the deadline will not be pushed back, the transaction will fail Monday. Now I sit, wait and consider the next move. If you look at the history of AVAS (the State Assets Resolution Authority), you will see that this would not be the first extension, because <> extensions have been granted. It would not be to my benefit, but to that of CFR Marfa,” the businessman added. Under Government Decision 526/2013 that approves the main conditions of the privatisation contract of CFR Marfa, GFR must pay in full within 60 days from the enforcement of this act, and the deadline is October 13. If not, the privatisation contract is rightfully voided without any need to place it on delay, or any other prerequisite and without going in court. The Ministry of Transport initiated Monday a government decision that would have pushed back the deadline on December 20, but it was not discussed during the cabinet meeting held Wednesday.
Prime Minister Ponta refused to comment the statement made by GFR owner Gruia Stoica about his intention to sue the state if the privatization process of CFR Marfa is not a success. “Everyone has the right to issue statements, we are a free country,” Ponta said.
Gruia Stoica said yesterday then that he will pay the EUR 170 M even without the approval of the Competition Council if the seller, Ministry of Transport, has fulfilled all obligations.
Plans regarding Viking project
In the meantime, Ramona Manescu, Minister of Transport, wants CFR Marfa to take part in an international freight transport project between the Baltic Sea and the Black Sea, entitled ‘Viking’. Manescu discussed the project Wednesday in Luxemburg, with Lithuanian Minister of Transport, Rimantas Sinkevicius. The objective of the project is to transport products from Lithuania’s port Klaipeda and the Ukraine’s port Odessa. CFR Marfa’s contribution would be taking over part of the container traffic in transit, carried out by Viking via the Romanian rail network between Giurgiulesti/Galati or Vadu Siret and entailing the transshipment of containers, or between Ungheni and Giurgiu/Russe, a Ministry of Transport press release notes.

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