Rail investment opportunities in Romania

EUR 4.7 billion for rail infrastructure projects

Total investments for future projects are worth RON 22 billion (EUR 4.7 billion). Financing sources are foreign funds, the state budget and own resources.

The implementation graphic increased in the first half of the year, CFR SA’s portfolio exceeding 400 projects on rail infrastructure and superstructure rehabilitation, improvement of exploitation capacities and transport quality and increase of rail traffic safety, CFR SA explains. Thus, for the works implemented within European financing programmes, the absorption level is estimated at 72% (over RON 740 million – EUR 164.5 million) for the first 8 months of the year.

In the first half of 2016, CFR SA completed six large investment projects worth RON 1.32 billion (EUR 293.4 million) and is currently implementing works for the rehabilitation of the railway infrastructure and superstructure worth RON 7.04 billion (EUR 1.56 billion). Apart from these projects, 58 more investment projects worth RON 12.6 billion (EUR 2.8 billion) were launched, while the rest of 336 projects were prioritised at the level of the 8 rail regionals, with total costs worth RON 1.03 billion (EUR 228.9 million).

 

Ongoing projects on  Paneuropean Railway Corridor IV

  • Rehabilitation of Braşov-Simeria railway (part of the Rhine-Danube Corridor), section Braşov-Sighişoara, Braşov-Apaţa, Caţa-Sighişoara subsections. Estimated costs amount to EUR 797.3 million, of which 677.7 million is the EU co-financing (85%). The project includes the rehabilitation of Braşov-Apaţa (38 km) and Caţa-Sighişoara (47 km) sections and will be completed by 2020.
  • The feasibility study for the rehabilitation of Craiova –Drobeta-Turnu Severin – Caransebes railway. Estimated costs EUR 9.9 million of which the EU co-financing is EUR 8.4 million. The project has to be completed by the end of 2017.
  •  Review of the feasibility study for rehabilitation of Craiova-Calafat railway. Estimated cost, EUR 1.7 million, of which EU cofinances 85% (or EUR 1.47 million). The project is expected to be completed by September 2017.

 

Recently signed projects for Paneuropean Railway Corridor IV

 

Km 614 – Bârzava (2a) and Bârzava – Ilteu

This May, CFR SA, and a consortium of Astaldi SpA – FCC Construccion – Salcef Construzioni Edili e Ferroviarie SpA –Thales Systems România SRL signed two contracts worth RON 3.45 billion for the modernisation of 78 km of railways. The sections to be upgraded are Km 614 – Cap Y Bârzava (2a) and Bârzava (cap Y) – Ilteu (cap Y) (2b), located on TEN-T 22 Priority Axis (pan-European Corridor IV) Nürenberg–Prague–Vienna–Budapest- Curtici–Simeria–Braşov–Bucharest-Constanta.

The objectives of the contracts are the rehabilitation of 77.95 km of rail infrastructure and superstructure so that passenger trains could run at a maximum speed of 160 km/h. Embankment and consolidation works will be carried out on the whole distance, as well as the construction of 28 bridges (of which two over Mures River) and 64 culverts, the construction of a 603-m long tunnel, civil engineering works in 11 rail stations (including stops), electrification and energy supply works, as well as the implementation of the ERTMS safety system (ETCS level 2 + GSMR).

The financing source for the execution of rehabilitation works is non-reimbursable European funds and state budget funds and the total estimated cost of the two contracts is RON 3.45 billion (VAT excluded), around EUR 760 million.

 

Ilteu – Gurasada

On April 21st, CFR SA, the national rail infrastructure manager in Romania, appointed the “Railworks” consortium, which includes Alstom, Aktor and Arcada Company, as the winner of the public tender procedure for rail subsection 2c: Cap Y Ilteu – Gurasada (part of TEN-T Paneuropean Railway Corridor IV).

The final financial offer of the “Railworks” consortium is RON 1.5 billion excluding VAT (EUR 329 million), the public procurement contract is to be concluded and signed, by both parties, at the end of the legal appeal period.

Funding for the rehabilitation of rail subsection2c: Cap Y Ilteu – Gurasada and section 3: Gurasada-Simeria is provided from non-reimbursable funds and from the State budget, and the overall objective of the project is the rehabilitation of the railway infrastructure and superstructure for passenger trains operation at a maximum speed of 160 km/h.

The works for the rehabilitation and modernization of Cap Y Ilteu – Gurasada subsection, for double electrified line and for the operation of trains with a maximum speed of 160 km/h will cover embankment works and consolidations on a length of over 22 km, modernisation of 15 bridges (of which 2 bridges over Mureş river with a central opening of more than 110 m), 17 bridges, 1 upper passage, 3 lower passages, 2 tunnels (837 m in total) and a 340 m high facility,  electrification and power supply works (including electric traction substations from the national network at 25 Kv or 27,5 Kv as well as SCADA system), for a length of 22 km,  signaling works (electronic interlocking system) and 69 switches, implementation of the ERTMS system (ETCS Level 2 + GSMR) implementation works, including RBC (Radio Block Center), for a distance of 22 km and civil works in 4 stations (including commercial stops and other flag stations).

 

Tenders

CFR SA launched the open tender for the rehabilitation of the Brasov – Sighisoara rail line on Brasov – Apata and Cata – Sighisoara sections. The estimated total value of the contract is RON 3.1 billion excluding VAT (EUR 690 million), the source of financing being 85% provided by the European Commission through the Connecting Europe Facility (CEF) and 15% co-financing from the state budget.

The rehabilitation project on these two sections Brasov-Apata and Cata – Sighisoara, includes a variety of works for rail infrastructure and superstructure: embankments , consolidations, bridges and viaducts, culverts, tunnels, overpasses, roads, catenary , rail traffic, passenger information system,  telecommunications, communications, signaling, optical cables, video surveillance, architectural works, electrical works, plumbing, thermo-ventilators, bank protection, signage, environmental protection. This route has 11 severing points, all of them with centralized electrodynamics (CED) – four railway stations, 15 stops, two major railway junctions and a double tunnel of 660 meters length.

 

“By defining the company’s development strategy and the economic and financial measures that we have implemented, we are actually reconsolidating CFR SA’s base activity. The main factors that influence this positive trend are realigning the existing assets on the transport market, reducing debts and arrears, staff training and management optimisation. With such an approach, CFR SA can recover in a relatively short period of time the gaps created by the lack of infrastructure investments over the previous years and will take the role of rail transport activity coordinator seriously, as it happens with all similar European companies”, declared Marius Chiper, General Manager CFR SA.

 

As the other European countries, Romania has submitted the CEF financing projects and has managed to contract EUR 1,2 billion within the 2014 and 2015 calls. Romania ranks second regarding the indicative budget compared to the other countries eligible in the Cohesion Fund.

10 proposals were selected within the 2014 calls, 4 of which from Romania and 6 from the EU with participation from Romanian beneficiaries. The CEF financing was of EUR 708 million, of which 687.6 million were allotted to rail projects. For Romania, CEF 2015 meant the selection of 11 proposals, 7 of which were Romania’s proposals and 4 EU’s proposals. The financing recommended for CEF (for which the agreements will be signed soon) was of EUR 519.3 million, of which EUR 441 million are for rail projects.

Romania is located on the Rhine-Danube and Orient/East-Med Core Network Corridors, which rank first of all corridors concerning the number of projects selected within the 2014 and 2015 CEF Transport calls. In this context, Romania has three ongoing rail projects on the Rhine-Danube Corridor and other 2 on the Orient/East-Med, for which the financial agreement is to be signed. Romania implements 3 projects with CEF financing and awaits the conclusion of the financing agreements for 2 projects.

 

CFR SA needs EUR 29 billion until 2030

„Increasing of the rail transport attractiveness, the improvement of the travel conditions by modernizing and developing the national rail network services, TEN-T railway network modernization and electrification are among the strategy overview for the railway sector in Romania according to the General Master Plan for Transport, approved by the Government in August 2016”, Marius Chiper emphasised.

The financing needs for the 2015 – 2030 period are of EUR 4 billion for the infrastructure  current maintenance, EUR 375 million for the recovery of current repair backlogs and EUR 12 billion for the recovery of renewal backlogs.

Regarding the rehabilitation and modernisation works for the main railway lines on the TEN-T corridor network, a total of EUR 29.3 billion is needed for the 2015 – 2030 period.

Thus, EUR 2.5 billion is needed for the rehabilitation of the Rhine – Danube Corridor the Northern Branch, EUR 2.1 billion for the rehabilitation of the Rhine – Danube Corridor the Southern Branch, EUR 182 million for the rehabilitation/modernisation on the Orient/East-Med Corridor, EUR 4 billion for the rehabilitation/modernisation of the Core TEN-T network and EUR 4 billion for the rehabilitation/modernisation of the Comprehensive TEN-T network.


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