What was expected now seems to be confirmed, as Romania’s newly founded state-owned rail freight operator Carpatica Feroviar is supposed to take over assets from the state’s other rail freight operator, the financially ruined CFR Marfă. However, Romania’s Competition Council acknowledges that such a move could prove to be legally problematic, and is looking for approval from the European Commission.
In an attempt to save state rail freight, Romania founded Carpatica Feroviar in anticipation of the bankruptcy of CFR Marfă. The latter has to return over half a billion euros in illegal state aid following a European Commission decision in 2020, an obligation it cannot fulfill. However, Romania’s plan to let Carpatica Feroviar purchase CFR Marfă assets, again with government funding, may once more amount to state aid. It is casting serious doubts over the plan.
The country’s Competition Council has now said that it is waiting for approval from the European Commission. If, however, Carpatica Feroviar is determined to be the legal heir to CFR Marfă, it could inherit the latter’s debts, putting a spanner in the works of Romania’s plan.
Carpatica Feroviar or new CFR Marfă?
“The essence of this case is that we have to prove that this Carpatica company, which is a company of the Romanian state, which uses CFR Marfă’s wagons and does the activity that CFR Marfă used to do, has the assets of CFR Marfă, is nevertheless a new entity that does not inherit the debts of CFR Marfă”, a Romanian official said.
“We have to prove to the Commission that this company will be profitable”, the official continued. “We have to give the Commission the business plan of Carpatica, we have to convince the Commission that that company will be profitable and then the state behaves like a prudent private investor and it’s not state aid, it’s an investment”.