Romania continues to move state assets around in order to evade the consequences of the 2020 illegal state aid decision by the European Union. That is what the head of Romanian rail freight association OPSFPR claims in a lengthy LinkedIn post.
In 2020, the EU decided that Romanian funding for national rail freight operator CFR Marfă constituted illegal state aid. That immediately plunged the company into a financial crisis and set it on a path to inevitable bankruptcy.
Romania decided to launch a new state rail freight operator instead, Carpatica Feroviar. The new company was supposed to fill the gaps left by CFR Marfă.
However, the Romanian government has employed some questionable tactics to reduce the financial pain from a Marfă bankruptcy. The idea seems to be that Carpatica Feroviar, with an initial state-funded capitalisation, takes over CFR Marfă assets, which then pays off its outstanding debts with it.
The money has come full circle
OPSFPR is highly critical of this working method. It highlights the 300 million euro capitalisation of Carpatica Feroviar for operational expenses and the acquisition of obsolete rolling stock of CFR Marfă, which it then uses in remarkable ways: “The new state operator is leasing the rolling stock recently purchased from CFR Marfă to…CFR Marfă. It seems like a new business model”, association head Simona Istrate states.
Istrate suggests that this is in effect a new type of state aid: “We are not aware of any SGEI entrustment, but we have become accustomed to surprises of all kinds.” SGEI is an EU policy package that defines the conditions for legal state aid.
“There can be no discussion of a ‘reset’, but of an internal rotation of assets and risks within the public sector, with the aim of circumventing the 2020 DG Competition Decision on the recovery of illegal state aid granted to CFR Marfă.” OPSFPR says it will continue to report deviations from competition rules to EU institutions.