Romania’s intricate transportation network is at the front line of the government’s latest phase of privatizations. Two companies currently under the auspices of the Ministry of Transportation, the national air carrier Tarom and Romanian railways, are both at different stages of the process.
“Right now we are cooperating with Lufthansa concerning the restructuring and rehabilitation of Tarom for its eventual sale. Some very promising results are expected very soon, both in regional flights and in long-distance flights,” says Transportation Minister Miron Tudor Mitrea, explaining that “Europe has had some very successful privatization schemes that we in turn would like to use.”

Miron Tudor Mitrea Minister of Transpor-tation

Mr. Tudor says the country’s public railway sector has been split into five companies that are ready for privatization. And although some infrastructure work is needed to make profitable sales, both General Motors and General Electric have expressed an interest in eventually entering the market in Romania, the minister adds.
CFR Marfa (or “Freight” in the Romanian language) is the leading firm involved in the transportation of goods at both the national and international levels. It was one of those five companies that emerged from the 1998 restructuring of the national railways into infrastructure, freight transport and passenger transport divisions. CFR Freight is also one of the public companies that do not owe money to the state.

General Motors and General Electric show interest in public railway sector

Vasile Tulbure Director General of CFR Marfa

“Our company is only supported by its own profits. In other words, we do not receive financial assistance from the state budget,” notes CFR Freight general manager Vasile Tulbure. “The state is still the main shareholder, but the management of the transportation activity is our only instrument with which to make a profit.”
Last year CFR Freight made a gross profit of some US$8 million with a turnover of US$480 million, while turnover for the year 2001 is forecast to increase by 15%.
“Our priority at the moment is to modernize our fleet of locomotives and wagons,” Mr. Tulbure says. “We have projects that include the implementation of a new diesel locomotive beginning in the year 2004 that will guarantee proper tonnage, comfort and minimum consumption.”

CFR Freight has also signed a contract with factories in Austria and Hungary that includes the modernization of 1,000 railcars in order to increase transportation volumes.
“One of our major concerns is to be able to ensure our traffic in Western Europe, which is why we have to supply our company with wagons corresponding to the European standard,” Mr. Tulbure explains.
Most of the company’s shipments are comprised of coal, oil products, sand cement, stone and chemical products. “But we are now trying to attract smaller companies that demand specialized transportation, even if it’s only on an occasional basis, of products such as wood, furniture and electronic products,” the CFR Freight chief says.

Mr. Tulbure says the company’s privatization process will not likely be completed within the two-year timetable, but he points out that there are already several private operators that use the CFR Freight network.
“There are three operators that have their own fleet of wagons and locomotives and have well-trained personnel. They are our competition now, but the Romanian market is a large one and there is plenty of room for everybody,” Mr. Tulbure says.