Four Years Since the Inception of CFR Restructuring

Interview with Mr. Mihai Necolaiciuc, the President - General Manager of CFR SA

Railway Journal: Mr. President, we would be interested for the beginning how would you appreciate the evolution of CFR SA Company during the future years of our railway system restructuring.
Mihai Necolaiciuc: As it is well known, the National Railway Company "CFR" SA has been founded on October 1, 1998, through the separation of the National Company of the Romanian Railways, as a consequence of the enforcement of the Emergency Ordinance no. 12/1998 and of the Government Decisions no. 581/1998 provisions. This reorganization has been imposed by the market economy criteria and aims as main goals the following: the separation of the exploitation and maintenance activities of the public railway infrastructure from the operation ones of the railway transport services and, on this basis, the exploitation on economic criteria of the public and private real estate of the railways.
The first objective we have proposed after the foundation of the company has been the maintenance of the railway infrastructure in safety parameters, so that the reorganization and the restructuring of SNCFR did not affect the quality of the railway transport. I consider that this objective has been reached because the four years of existence of CNCF "CFR" SA did not experience any major railway event.
As it is natural, during this period our company has recorded so many achievements as well as shortcomings. From the first category I would itemize: - putting into operation, in year 2001, of the first investment objective with budgetary financing - the modernized CED equipment in Ploiesti Sud, the most modern railway electronic signaling equipment in Central and Eastern Europe; - the attraction of new international financing sources for the rehabilitation works of the railway sections afferent to the sectors of the pan-European corridors IV and IX that cross Romania, as well as for the modernization of the main railway stations; - the starting off of the rehabilitation works on the corridor IV, on Bucharest - Ploiesti - Campina - Brasov railway section, being finalized in 2003; - the consolidation of the railway infrastructure in Portile de Fier area; the resuming of the works that have been abandoned on Valcea - Valcele, Alunu - Seciuri, Harlau - Flamanzi, Saveni - Darabani railway sections and, not at last, the promotion of a permanent dialogue with the international financial institutions (IMF, BIRD, EBRD, EBI) in order to establish a real partnership and a mutual trust climate. We can also consider as an accomplishment the fact that from the economical point of view CNCF "CFR" SA has a profitable activity, put across in the annual recording of a profit - of a small value, indeed, but still existing. There has been succeeded the maintenance of a stable balance between the incomes and the expenses, and this, as a consequence of the fact that during the last years the maintenance works of the railway infrastructure have been executed especially on the basis of the funds resulted from the infrastructure access tax.
I can also appreciate that the politics in the filed of the human resources has been the most appropriate, during the mentioned period not being recorded social commotion, although the company has confronted with personnel restructuring. The reasons of lack of satisfaction are related to the current statistical data referring to the structure and the volume of the transports, which show that the road sector, unfavorable to the railway transport, although the railway system has a highest energetic efficiency and a 10 times lower level of pollution in comparison with the road sector, and with regard to the safety traffic, at the railway sector this is 2,900 times better. Another shortcoming is the fact that the technical state of the railway infrastructure has recorded a permanent degradation, as a consequence of the insufficiency of the necessary funds for the execution in due time of the maintenance works at the railways.
R.J.: Which is, according to your opinion, the stage reached today by CFR SA and which is the way it is heading on?
MN: As I have presented, the company has promising evolved, our slogan being: CFR- solid tradition, dynamic future! strives more and more to come true.
CNCF "CFR"SA is the company, which provides to the transport operators in Romania the access on the railway infrastructure. Presently, the potential of the railway network is used only partially, the economical development imposing major efforts for the modernization of the existing capacities, the increase of the traffic speeds. The Romanian Railways hold the forth place in Europe from the volume of activity point of view, the main parameters of the network structure being: 22,000 km of lines, over 24,200 switches, over 18,700 of bridges and culverts, and over the 200 tunnels. In order to bring them at European level, have been elaborated the annual maintenance and modernization programs.
An important objective "on the agenda" is the provision of the compatibility and the interoperability with the European railway system. In this respect, CFR SA is permanently concerned of the rehabilitation and the modernization at the current level of the requirements especially of the railway sections included in the European transport routes. The importance of the corridors IV and XI, which transit Romania in the structure of the traffic unfolded on CFR network consists in the fact that on around a fifth part of the overall length of the network is unfolded almost half of the railway traffic.
The CFR strategy for 2001-2005 stipulates works at the railway infrastructure in order to allow the increase of the train traffic speed at 160 km/h, as well as the modernization of the main railway stations on the two corridors, the increase of the safety degree in train traffic through the introduction of certain electrical equipment and the modernization of the data transmission system by utilizing the fiber optics network.
J.F.: Could you consider a different approach?
MN: The answer is "NO". The results obtained by our company, as well as by the other companies detached from SNCFR, lead us to the conclusion that it was a very good option.
Additionally, there has been achieved a greater opening to the market economy: as a consequence of the enforcement of the reform in the railway transport in Romania through the restructuring of SNCFR, there has been provided the organizational framework through which on the public infrastructure can operate, in competition system, several passengers and freight transport operators. In these conditions, the role of CNCF "CFR"SA is the one to provide non-discriminatory way the access for the public and private shippers on the railway infrastructure and to guarantee the unfolding of this activity in maximal safety and efficiency conditions.
The needs of the transport market have led to the orientation of the company's efforts towards the "client" in order to offer services, through the provision of a safe infrastructure for the railway operators, as well as through the extension of the services, which can be supplied on the basis of the real estate that is available. Therefore, there have been capitalized, through the introduction in the public circuit, the hotel bases from the private real estate of CFR: Astoria Hotel, in Bucharest, Snagov Sat Complex, in Snagov, Decebal Hotel, in Eforie Nord, and Bucovina Hotel, in Vatra Dornei.
Another additional activity, which CNCF "CFR"SA is aiming to provide - through its CFR SA Telecommunication Subsidiary- is to supply telephone public services. The agency aims that starting with January 2003 to be launched on the liberalized market of the communication services, having already installed 3,500 km of the fiber optics all over the country, and I can appreciate one of the main telephony operators in Romania.
R.J.: It would have been better if the results of the restructuring of other European railway systems took place in order to have a source of inspiration?
M.N.: The fact that the reform has been stared off for four years allows CNCF "CFR"SA to be a step forward with regard to the adaptation at the market economy, the concerns for the provision of the interoperability with the other railway administrations and, not at last, to take advantage of the geographical position that is extremely advantageous for the Romanian railway network, which is located on the direction of the pan-European corridors IV and IX.
With respect to the future plans CNCF "CFR" SA has as main objective the continuation of the reform process through the enforcement of the provisions of the European Union regarding the railway transport. We also wish to develop the collaboration with other European railway administrations, as well as the cooperation with various international financial institutions in order to identify the optimal solutions for the development of our infrastructure.

Recorded by Ileana Statie