​There has been a lot of discussion in recent weeks about the creation of a new state-owned rail freight company, Carpatica Feroviar, a company that is supposed to take over an important part of CFR Marfă, the state-owned operator that is extremely collapsed and heavily in debt.

The government is discussing an emergency resolution proposed by the Ministry of Transport to create several companies that will play a strategic role in the region. Among them is Carpatica Feroviar, a company that will have a legal obligation to provide strategic transportation for the Romanian state.

“We saw in this war year that we needed CFR Marfă, transportation with Ukraine was mainly carried out with CFR Marfă. He will take certain assets from there, and after that no one prevents him from developing,” said Minister Sorin Hridjanu, as quoted by stirileprotv.ro.

The authorities claim that the “extraordinary events of 2020-2022” revealed the need for the Romanian state to be able to rely on the existence of a railway freight transport company that can carry out the following types of transport:

• transportation of troops, equipment, equipment, weapons, in case of mobilization of the armed forces of Romania and strategic partners;

• transportation of humanitarian aid to areas affected by armed conflicts to ensure international cooperation;

• transportation of grain, raw materials and fuel to avoid a food or energy crisis.

But it will not be easy. As Club Feroviar points out, the new company will take over the production assets of CFR Marfă, a state-owned operator with huge debts. It is possible that the current CFR Marfă would be left with useless assets and debts to the state and CNCF CFR SA, and Carpatica Feroviar would have to be a “clean” company starting from scratch.

However, it remains to be seen whether this prank will be liked by the European Commission, which requires CFR Marfă to return state aid received during the unfinished privatization in 2013, in the amount of 570 million euros, the publication also notes.

CFR Marfă has been declining for more than 20 years in all sections. The state-owned company had 32,000 employees in 1998, 17,000 in 2009, 9,000 in 2013, and around 3,400 employees today.

Other European countries did not allow the decline of their national railway operator. The largest profile company in the EU is Deutsche Bahn Cargo, and the second is PKP Cargo from Poland. And countries like Austria and Lithuania have strong operators in their regions.

This is stated in the draft emergency decree on the creation of Carpatica Feroviar SA

“Given the situation in which CFR Marfă finds itself, for which the main objective of the Romanian state is to recover illegal state aid and to implement the Decision, there is a need to create a new viable national interest company to serve the country’s defense needs.”

Goals of Carpatica Feroviar:

• strategic – taking into account Romania’s national security and partnership arising from its international obligations;

• commercial is a company with state capital, financed from its own sources, which will carry out rail freight transportation, meeting the requirements of the rail transportation market.

“The company will have a legal obligation to provide strategic transportation of the Romanian state, balancing the risk of refusal of private transport companies to perform certain railway transportations or even their inability to take them over in crisis situations. The very term “crisis” reveals the urgency that characterizes the need to provide such transport services, which, in the event of the inability to take them over or the refusal of other private transport companies, will lead to delays that may affect national security. and external partners”.

The draft resolution also states that the Romanian state is obliged to quickly return the state aid, recognized as illegal by the Decision of the European Commission dated 24.02.2020, the aid granted to CFR Marfă. The immediate non-return of state aid (2.6 billion lei + interest) may lead to additional costs, the cost of which may significantly increase the amount declared as state aid.