COMPANIES ECONOMY TRANSPORTS

CFR Marfa re-enters privatization list

CFR Marfa, the Transport Ministry’s Cinderella, split off from SNCFR in 1998, will be put up for grabs again by the end of this year, following the failed privatization attempt in the autumn of 2013.
In the meantime, CFR Marfa specialists have “cleaned up” the company, sacking another 2,800 employees, have lowered its losses from over RON 400 M in 2012 to approximately RON 27 M at the end of last year, and have signed contracts that bring at least 20 per cent of the revenues.
Approximately two years after the failure to privatize CFR Marfa, when Transport Ministry officials were in a hurry to sell the rail transport operator for approximately EUR 200 M, the Government wants to change the privatization strategy. Despite the fact that former secretary of state and current Transport Minister Iulian Matache proposed the listing of CFR Marfa on the stock exchange as early as June, the procedures will not start before the end of this month.
The first talks and consultations on the issue of resuming the privatization of CFR Marfa will take place with the Competition Council. “We are studying privatization options, it will be a meeting in which we propose to the Competition Council a new privatization variant. We will consult the Competition Council inspectors after which we will present the resumption of the privatization process to the European Commission and the International Monetary Fund. Moreover, with the re-launch of the privatization process, the European Commission has to issue an opinion concerning the erasure of debts. The European Commission is the one to state whether that is state aid or not, not the Competition Council,” Transport Ministry officials explained.
In the summer of 2013, in the midst of CFR Marfa’s privatization process, the government erased the company’s fiscal debt by converting it into shares. CFR Marfa’s debts were erased in 2014 too. The company has less than 6,500 employees out of 30,000 previously. The situation is growing worse from one year to the next, a situation noticed by a former CFR Marfa employee, now retired, who explained that a lot of train cars and locomotives are not repaired on time.
“The rolling stock fleet was huge, at least five times as big as it is now. CFR Marfa has contracts for naught if there is no profit. The train cars need periodic maintenance works and major overhauls,” the former CFR Marfa employee explained. Moreover, the company’s budget does not include funds for maintenance and major overhaul works. “Millions of Euros are needed for repairs, hundreds of locomotives and train cars have a technical repair and major overhaul backlog. Thousands of train cars and locomotives have been scrapped. Apart from train cars and locomotives, CFR Marfa also owns hundreds of buildings and plots of land worth dozens of millions of Euros,” the aforementioned source told us.

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