EC spots EUR 570 mln illegal state aid at RO freight railway company CFR Marfa

The European Commission has decided that Romania’s freight railway operator CFR Marfă received incompatible state aid worth at least EUR 570 million from the Government.

Consequently, Romania must now recover the illegal aid plus related interests from the state-owned company, currently under pre-insolvency procedures.

“The state aid consisted in the cancellation of the company’s debts to the budget and the non-collection by the public creditors of the amounts owed by the company,” explained Margrethe Vestager, executive vice president of the European Commission, responsible for competition policy.

Earlier last autumn, the Commission calculated that the company received incompatible state aid in amount of EUR 400 mln.

“We know that the decision has been written and will be communicated officially by the end of the year. The company received aid for privatization, in 2013, when the debts were written off. However, it has neither recovered financially, nor has it been privatized. Instead, it has continued to accumulate losses and its situation is obviously not sustainable,” said, at that time, Bogdan Chiriţoiu, president of Romania’s Competition Council.

In early February, CFR Marfa entered the pre-insolvency restructuring process managed by CITR insolvency house, which was appointed by the Bucharest Court to help the railway company recover financially over the next two years.

CFR Marfa owes EUR 363 mln to the state following a state aid provided by the Government in the past, and over EUR 200 mln to the company that manages the railway infrastructure, CFR, also controlled by the state. The debt sums up to the figure calculated by the European Commission as incompatible state aid.

(Photo: CFR Marfa Facebook Page)