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US, Austrian firms back in Romanian rail freight sale

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(Globalpost/GlobalPost)

Romania put an attempt to privatise its rail freight business back on track on Friday, in line with conditions laid down by the IMF and EU, saying that three disqualified candidates had re-qualified.

Under an agreement on financial help in 2011, the International Monetary Fund and European Union required Romania to privatise the company, CFR Marfa.

The state intends to sell 51.0 percent of the company at a price set initially at 180 million euros ($233 million).

The ministry of transport said on Friday that three companies had qualified for the next phase of the process.

It named them as OmniTRAX, a private US company, the Romanian railway group (GFR) which is the leading private rail freight operator in Romania, and a consortium.

The consortium comprises Romanian company TFG (Transferoviar Group), and Austrian investment fund Donau-Finanz and CO KG Austria.

They have until June 5 to present their final bids. The result of the tender will be announced on June 20.

The financial daily newspaper Ziarul Financiar ran a headline on its website "Surprise turn of events", noting that the three bidders had failed to qualify when the first attempt at the tender was made last week.

Since then the government has relaxed terms and conditions. Now candidates may participate if their turnover in the last three years exceeded 20 million euros instead of 100 million euros required previously.

Romania has repeatedly failed to respect the timetable for the privatisation and has obtained a delay of three months from the IMF and EU, up to the end of June, to privatise the business.

In Romania and Bulgaria, two former Communist countries which joined the European Union in 2007, the privatisation of state-owned rail freight companies has been announced for years, but repeatedly put off.

CFR Marfa employs about 9,000 people and carried debt of 1.5 billion lei (347 million euros). It has big property assets.

In 2011, the company had sales of 1.107 billion lei (251 million euros) and made a net loss of 93 million lei (21 million euros), on the basis of the latest available official data.

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http://www.globalpost.com/dispatch/news/afp/130524/us-austrian-firms-back-romanian-rail-freight-sale