The privatization of Romania’s railway freight company CFR Marfa was interrupted and could not be completed by the end of this year, as the privatization strategy has not received the green light from the country’s Supreme Defense Council (CSAT). The project already had the approval from the Finance Ministry, the Administration and Interior Ministry, National Defense Ministry, from the Justice Ministry and from the Competition Council. The CSAT signature was the only one needed, according to the Transport Ministry, which was not informed of the reasons the project did not get the final green light.
“What we’re seeing is the incapacity of public institutions to respond to current challenges and needs,” said Horaţiu Buzatu, deputy state secretary with the Transport Ministry. The privatization process was not blocked, but rather interrupted, or better yet, delayed, he went on saying. Respecting the end of the year deadline for this privatization could be a problem in this case, said Buzatu.
The Transport Ministry representative believes that ongoing naming private management for CFR Marfa will only be a surrogacy alternative, more like palliative care, and will not solve the company’s problems.
This is the fourth privatization attempt for CFR Marfa, and now the Romanian Government wants to sell via outcry bid the full share package, as well as the package owned by the state after the conversion of the company’s debt into shares.
Earlier in September, the country’s Government said it was in concrete and advanced talks over the CFR Marfa privatization, which was one of the priorities for this year. Romania wanted to sell 20 percent of CFR Marfa, either through an Initial Public Offering, or with a strategic investor, by October this year. The company posted losses of EUR 31.3 million last year, 68 percent higher than the level approved by the Government. CFR Marfa’s last profitable year was 2007.
(photo source: CFR)