The Romanian Government recently established a new fully state-owned company in the rail freight transport sector. The company, named Carpatica Feroviar, will replace the bankrupt CFR Marfă.

The new company was created to "serve the country’s defense needs and ensure prioritized mobility," according to the explanatory note cited by Economedia.

It also replaces the previous such company, CFR Marfă, from which the Romanian state must recover state aid of RON 2.6 billion (EUR 522 million) plus interest, according to a decision from the European Commission. The company, which holds a 31.2% market share in the rail freight transportation sector, had been operating at a loss for years.

However, in the context of the war in Ukraine, the Romanian Government decided it still needs a state-owned rail freight company. The new company, Carpatica Feroviar, will engage in two types of activities, namely strategic interest, to ensure prioritized mobility needs, taking into account Romania’s partnerships stemming from its international obligations and the need to cover freight transport in crisis situations; and commercial, carrying out rail freight transport.

There are 39 rail transport operators on the Romanian domestic market, five of which hold licenses exclusively for passenger transport, and three have licenses for both passenger and freight transport.

"The European rail freight sector is under pressure, given the current geopolitical context caused by the military conflict in the Black Sea region, where the Romanian state, through the national rail freight operator, plays a decisive role in ensuring rail freight transport to and from Ukraine," the Government says in the explanatory note.

The first members of the company’s Board of Directors are employees of the Ministry of Transport or its subordinate institutions, as shown in the cited document. Their mandate will automatically end once the shareholders’ general meeting designates administrators. 

radu@romania-insider.com

(Photo source: CFR Marfa on Facebook)