CFR Marfă’s privatisation enlists in a phase which sets the beginning of selling the majority package of shares of several European companies, thus drawing the shape of a European process. The privatisation of CFR Marfă, OSE, PKP Cargo, PKP Intercity and probably BDZ will help the countries that own these companies gain more efficient investments in sectors affected by deficit, including railways and attract new foreign investors. Investments in the region plummeted, but what matters the most is the activity relaunch of the company to be privatised. The privatisation process will also stimulate market liberalisation by allowing a strong foreign group which probably activates on other neighbouring markets as well and which plans to integrate activities in a single network of services, to access the market. This will positively influence other aspects as well, such as the interoperability of East-European railway systems.
The Romanian State bets all cards on the potential strategic impact of CFR Marfă’s privatisation since it is possible that this interest would have a greater impact than the financial aspect, the company’s assets and market share being exceeded by the opening that CFR Marfă’s takeover could provide on the local and neighbouring markets. At the same time, the authorities want to draw attention on the potential of the Romanian rail freight transport market, estimated to rank 6th in Europe, before Spain and second in Eastern Europe, after Poland, in what concerns the number of population and the buying power, the length of the railway transport network and the modal share of the other freight transport modes. All these provide significant development opportunities in the region (especially towards the Republic of Moldova and the CIS).
An important problem in CFR Marfă’s privatisation is the destination of money resulted from the transaction. There are rumours according to which the money will not be invested in the railway sector, a sector framed in the “deficitary” category, as mentioned in the privatisation strategy. There is also the unfortunate tradition of establishing all kinds of national development funds to takeover the money coming from the privatisation of state-owned companies. Thus, the money is spent on social investments and at a much lower value due to inflation and depreciation of national currency since investments are delayed by authorities. Teodor Postelnicu, counsellor within the Romanian Ministry of Transport and Infrastructure, declared “The Romanian Ministry of Transport will demand the allocation of the amount thus obtained strictly to railway investments”. According to railway specialists, the Government Decision on CFR Marfă’s privatisation should include a provision on the mandatory character of allocating the money to railway repairs, so that CFR Marfă’s buyers would not have to run at speeds of 20 km/h with zero return.
Poland doesn’t want to sell PKP Cargo to a company owned by another state
CFR Marfă’s privatisation would be the second big privatisation in Europe after the Hungarian national operator MAV Cargo was bought by Rail Cargo Austria for EUR 400 Million. CFR Marfă has also attended the tender. The privatisation process was slow and shadowed by trials and corruption accusations, officials from the Hungarian company being accused of receiving bribe to favour the Austrian company. This was the main cause which made the European Commission’s positive opinion delay. Specialists say CFR Marfă’s privatisation could take more than two years, while potential corruption scandals would postpone conclusion even more. These delays could have a negative influence on the State’s objectives on CFR Marfă’s privatisation since the market value of the company could drop even more, the rolling stock would age and the operation licenses would expire (as in the case of RO-LA cars). Therefore, the idea of a flash transaction has already been circulated as the sole solution to avoid such problems.
CFR Marfă’s privatisation would probably complete a potential privatisation hysteria of both Romanian national companies and European railway companies. Economic experts say that during the discussions with the IMF, CFR Marfă is the first company to be privatised in a series which includes the national post company, Posta Romana, CEC Bank or energy companies.
In Poland there are signs which indicate that the State wants to eliminate the participation in the tender for PKP Cargo of companies which have another state as majority shareholder. Maria Wasiak, Deputy President of PKP Group declared the group wants to attract a private investor and not another state-owned company and that the consultancy company to elaborate the privatisation strategy and publish it in September 2010, McKinsey, has already been informed on the State’s requirements on the matter.
by Alin Lupulescu
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