The Romanian authorities have decided to resume the privatisation process of the national freight transport company hoping to revive the company’s activity. CFR Marfă plans taking back the market share lost during 2008-2010. In July 2010, the Romanian Ministry of Transport and Infrastructure elaborated CFR Marfă’s privatisation strategy seeking to optimise the price allocated after selling the 100% package of shares owned by the state and observe the deadlines established with the IMF and the European Commission. The contract attribution criterion will be exclusively the price. CFR Marfă is one of the largest cargo companies in Europe with a vehicle feet of over 900 locomotives and 42,000 cars.
The selling announcement of the 100% package of shares owned by the state at CFR Marfă has not been a surprise, the first initiative of the national freight transport operator’s privatisation dating back from 2003, during the period of great privatisations when state-owned companies from the area of communications, banking and pharmacy were sold. However, back then CFR Marfă had a 90% market share and operated on a non-liberalised market. The situation changed over the next years. Today, the operator holds a 49% market share and has launched an ambitious development programme aimed to boost activity.
CFR Marfă is successfully operating in the coal transport area, over half the coal carried in Romania being loaded in CFR Marfă’s trains. The operator is the only carrier which has enough rolling stock to carry the national coal production. There are over 10,000 Eacs cars and nearly 5,000 Fals cars used in the transport of coal.
CFR Marfă also holds the majority package of shares at CFR Ferry-Boat Company which owns 2 ferry boats for loading and discharging the freight carried on rails. The national operator is the only operator capable to perform RO-LA (rolling road) transport. Its specialized rolling stock fleet includes 160 platform wagons, as well as loading/discharging ramps in several railway stations in Romania. In July 2010, CFR Marfă initiated a first RO-LA transport test on Bucharest – Craiova – Targu Jiu – Arad route which proved successful. The route was covered in 15 hours and 37 minutes, 1 hour and 23 minutes less than estimated, thus proving the usefulness of such a service in case it is regularly introduced. 3 daily journeys could be operated, the equivalent of a shift of 100 lorries from road to rails. CFR Marfă also owns 27 freight terminals that it plans to upgrade using European funds and for which the operator receives many exploitation demands from the logistics operators which activate on the Romanian profile market.
Officials avoid speculating how much the company is worth
As the Romanian Minister of Transport Radu Berceanu declared, the company urgently needs the investment of a strategic operator to become profitable again. The minister used to say in 2009 that he expects the acquisition to be worth EUR 1 Billion, just like his predecessor leader of the Transport Ministry, Ludovic Orban. Economic analysts believe the amount is exaggerated. They say the new economic context and the privatisation duration, estimated to last as much as two years by pessimistic experts, based on the similar privatisation example of the Hungarian national operator, MAV Cargo, will affect the final price.
This time, the Romanian Ministry of Transport and Infrastructure, has limited at saying that it would elaborate an evaluation report and tender participants had to hand in a guarantee worth 20% the nominal value of the share package to be sold. The tender participation tax is worth 5% of the value of titles for each investor interested to attend the tender. The privatisation process will include one phase consisting in a call tender. The consultancy works had been already developed by a consortium which included Deloitte and Bostina & Asociatii. However, the study has not been completed following the privatisation postponement and for the new privatisation strategy, the ministry announce it would select another consultant.
by Alin Lupulescu
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