Another privatization fail on the horizon: Romanian state failed to meet obligations in CFR Marfa privatization, bid winner says

Grup Feroviar Roman (GFR) owner Gruia Stoica, whose company won the bid for state-owned CFR Marfa, says the Romanian state has failed to meet some of its obligations to GFR during the privatization process. Stoica said the privatization committee had an "unacceptable" attitude and had failed in some of its responsibilities, raising the possibility of yet another failed privatization attempt. “Unfortunately I must say that until the last moment, namely until Friday when we were called to the ministry to solve the dead-end generated by the privatization committee’s incapacity to fulfill its responsibilities in time, the committee’s attitude was one we consider unacceptable to a serious investor,” said Stoica, quoted by local business daily Ziarul Financiar. “We went to discuss and seek solutions to the seller’s problems, not ours, and the proposals that have been made are absolutely unacceptable,” he added. Romania’s Transport Minister Ramona Manescu said that it was "the duty of Cristian Ghibu - president of the privatization committee, together with the advisers to manage this process of privatization in favor of the Romanian state." GFR has called for the Ministry of Transport to publicize the privatization contract of the railway freight company CFR Marfa and have asked for the direct involvement of the Transport Minister, in order to avoid a possible failure of the privatization. Romanian company Grup Feroviar Roman (GFR), the winner of the bid for CFR Marfa, has so far paid EUR 30 million of the total EUR 202 million to be paid for 51 percent of CFR Marfa’s shares. The privatization contract was signed in early-September and the deadline for the privatization is October 14. This was the second attempt to privatize CFR Marfa, and is not the only example of a failed privatization in Romania. The privatizations of Oltchim also failed last year after a bid winner was announced, amidst a scandal which involved plenty of media coverage, while the privatization of CupruMin had also failed after lack of agreement between the bid winner and the state. CFR Marfa is the largest railway freight carrier in Romania with a turnover of EUR 261 million in 2011 and a loss of EUR 22 million. GFR is CFR Marfa’s main competitor in Romania and the two companies together control 70 percent of the railway freight market in Romania. Irina Popescu, irina.popescu@romania-insider.com