Investments for Railways Rehabilitation

The currently developed strategy for Romanian railways started in 1994, having as main objective that of recreating the commercial base for the company in the field, namely the ex SNCFR, which presupposed a complex restructuring program for all its specific activities. Thus, a new project was conceived, called the Railway Rehabilitation Program (PRCF), including several individual projects, which necessitated external financial assistance.
Very well structured on categories, the project aimed to some strategic objectives for the unitary restructuring of the ex SNCFR. Which meant, in fact the realisation of a legal system in compliance with the standards imposed by the European Union, an internal organisation according to the new legal systems in efficiently adjusted for satisfying the market demands, and of course free access for railway operators to the infrastructure. This program also included a financial rehabilitation through combined measures of costs reductions and income increase, as well as through restructuring the financial-accounting system. Another very important objective aims at investments programs for infrastructure, rolling-stock material, signalling system devices, and cybernetic systems, communication network, environment protection. All these programs are in process at the moment.
For supporting the restructuring program, certain international financial institutions agreed to participate with funds along with the Romanian Government, which makes financial disbursements out from the budget of state. The major financial institutions are as follows: IBRD - with a loan of 120 million dollars, EBRD - with a loan of 72.6 million dollars and EC - PHARE - with a non-payable loan of Euro 58 million. EBRD loan was completed with another Export Credit Loan Agreement Technique (ECLAT) in amount of 32.2 million dollars, in equivalent, designated through public auction to a group of French banking institutions managed by BNP Paribas, with guaranties for exportation from COFACE France.
A very important fact that has to be stated is the unitary character of PRCF, reflected by the enlisting in the financial instruments of IBRD, EBRD and PHARE, the Activity Plan for Restructuring (PAR), a multifunctional plan that includes all the railway domains. PRCF was generally defined as a major investment program for supporting the objectives of PAR, no matter the external financial source. According to the representations within the loan agreements, railway administration is liable for the annual update of Par, and for its presentation to the above-mentioned banks, by June 30 of each year, in order to allow the banks to send their commentaries to the Romanian Government and to the railway companies of the ex-SNCFR. On the other hand, the unitary character of such program is given also by the fact that, all the financial assistance instruments are interdependent.
Even if this complex program is effective with July 1996, when SNCFR was still in charge, radical changes, as it may be considered the reorganization of SNCFR, did not affect the continuity of such implementation of the Railway Rehabilitation Project. This change has been approved by the three financiers, and consequently the financial instruments have been adjusted so as to reflect the new institution structure of the railway field and the reorganization legislation. Thus, the National Railway Company CFR SA took over IBRD and PHARE non-payable credit, whereas Public and Freight Railway Transportation companies became the beneficiaries of EBRD loan. Furthermore, Public Railway Transportation was also the beneficiary of the co-financial agreement ECLAT, and a portion of the EBRD loan was allocated to the those five companies as a result of the ex- SNCFR reorganization. Another portion of the respective loan is the amount of a technical assistance program for continuing the restructuring of the railway field under direct supervision of the American company Chambers, Conlon&Hartwell/Seneca Group.
As I said before, the unitary character of the PRCF is the same for the financial instruments that have been changed accordingly. In this sense, all the three financiers approved the unitary continuation of managing such project by the Project Management Unit (UMP), previously created during the existence of the ex-SNCFR in compliance with the loan agreements, and legally taken over by SMF -SA, after the above-mentioned reorganization.
Regarding the modality in which this program is developing, we inform you that out of 51 contemplated projects, only one is still in the process of negotiations. Thus, we could admit the fact that the disbursements allocated by the respective financiers have been almost integrally engaged until termination of the validity date, which is the end of 2002 (EBRD and PHARE) or the middle of 2003 (IBRD).
As a conclusion, we may estimate that the materialisation of all the programs included in PRCF, underwent good conditions, without SNCFR reorganisation affecting their evolution, due to the fact that all the financial institutions have positively appreciated the modality of implementing and managing of such complex project, both during SNCFR administration and after its reorganisation, as well. One of the conditions that made possible for PRCF to go on without deficiencies, is the existence of certain precise norm and regulations both before and after the reorganisation, which permitted an efficient collaboration between all the involved factors for the better implementation and management of the project.

Magdalena Bran, reporting.