Romanian public transport company Metrorex, which operates Bucharest’s subway system, plans to draw EUR 1.3 billion in EU funds by the end of this year to finance its investment programs.

The company plans to expand Bucharest’s subway network in the following years with new lines to some of the busiest neighborhoods as well as to the airport and the residential areas around Bucharest.

“We have EUR 400 million EU funds approved so far, and our objective is to reach EUR 1.3 billion financings from the European Commission by the end of 2015,” Metrorex announced in a press release.

The company has an investment budget of some EUR 391 million in 2015, 52% higher than in 2014, and three times higher than in 2012. The investments for this year are almost fully covered with European non-refundable funds (99%), compared to 85% in 2014 and 31% in 2013. In 2012, the company’s investments were fully funded from the state budget.

Most of the company’s investments go into developing the subway infrastructure.

The most advanced project is the Drumul Taberei – Pantelimon line (number 5), which will connect the west of Bucharest to the east, going through the very center of the city. The line has a total length of 16.2 kilometers and 22 stops.

The first segment of the route will connect the busy residential neighborhood Drumul Taberei to the Eroilor subway junction and should be finished by the end of 2016. In the next phase, programmed to be completed by the end of 2018, the subway line will reach the Universitatii Square, one of Bucharest’s central points. The remaining segment, which goes to Pantelimon neighborhood in eastern Bucharest should finish in 2020.

Another major project is subway line 6 which will go from Bucharest’s main train station Gara de Nord to Bucharest’s main airport Henri Coanda International Airport. This line will also have about 16 kilometers and will pass through Baneasa, one of Bucharest’s richest neighborhoods, which is not currently connected to the subway. Metrorex plans to get European financing for this line that should be finalized by 2020, when Bucharest will host three matches of the European Football Championship.

Metrorex will also expand its number four line, which goes from Gara de Nord to the north of Bucharest (Straulesti), and to take this line down to the south of Bucharest, to Gara Progresul train station.

Except these large infrastructure projects, Metrorex also plans smaller investments in upgrading its equipment. The company plans to change the access system in the subway stations with contactless devices, in order to make it easier for passengers. This project should be implemented by the end of this year.

Metrorex also plans to buy new subway trains. The company currently has an ongoing tender to purchase between 43 and 51 new trains for its Drumul Taberei – Pantelimon line. According to market sources quoted by Hotnews.ro, Spanish group CAF won the bid asking a price of EUR 6.06 million (EUR 309 million for the maximum lot of 51 trains). Metrorex hasn’t made any public announcement yet, as the tender result was contested by another bidder.

Metrorex had total revenues of EUR 147 million in 2014, 8.3% higher compared to 2013, mostly due to higher subsidies from the state. The company’s own revenues were flat at EUR 44.6 million.

Metrorex transported more than 173 million passengers in 2014, which generated EUR 39 million in revenues or EUR 0.22 per passenger, according to a public document. The company plans to increase ticket prices by up to 33% starting the end of March.

Metrorex also makes money from leasing commercial spaces and selling advertising exposure. These activities generated almost EUR 6 million last year.

The company’s expenditures amounted to EUR 147 million last year, of which EUR 66 million were personnel costs, and EUR 33.7 million were maintenance costs (paid to Alstom).

Metrorex is fully owned by the Ministry of Transport.

Andrei Chirileasa, andrei@romania-insider.com