Romania's Government will dismantle the country's state-owned freight railway company CFR Marfa, according to a letter sent on May 11, 2021, by the European Commission to the country's Permanent Representation to the European Union.

This marks a sharp departure from the plans announced by the former Liberal Government of prime minister Ludovic Orban, which revealed a plan to rescue the company that accumulated EUR 1.5 bln of debt - more than its assets estimated at EUR 1.1 bln.

Under the Government's plan, as revealed in the letter consulted by Bursa daily, some 1,400 of the company's 5,000 employees will be made redundant (trade union confirmed they were already informed) by July 5. Another 2,500 employees might be transferred to the courier arm of CFR group - Rofersped, which will also take over most of the rolling stock from CFR Marfa.

Rofersped is not compelled to employ the 2,500 - but it is supposed to hire at least part of them to operate the trains. But Rofersped will take over only 41% of the volume transported by CFR Marfa.

The Romanian state-owned freight transport company was placed by the Government under a pre-insolvency procedure last year, after the European Commission ruled in February 2020 that the facilities granted by the Romanian Government within the privatization process started in 2013 are part of the state aid category. Therefore, the Commission instructed the Romanian state to start the procedures for recovering the state aid illegally granted to CFR Marfa: nearly EUR 800 mln, including the interest and penalty. 

iulian@romania-insider.com

(Photo source: Inquam Photos/George Calin)