NEW TRENDS IN ROMANIAN RAILWAYS REFORM

NEW TRENDS

NEW TRENDS

IN ROMANIAN RAILWAYS


REFORMREFORM

- Reform stopped after 1998 ?- Reform stopped after 1998 ?- Necessary time for consolidation- Necessary time for consolidation

-New challenges and more difficult New challenges and more difficult tasks to be achieved tasks to be achieved

NEW TRENDS

NEW TRENDS



REFORMREFORM

- Cost control system- Cost control system- Complex IT system- Complex IT system

- Privatization of CFR-Marfa- Privatization of CFR-Marfa

- Staff reduction- Staff reduction- Outsourcing- Outsourcing

Staff reduction in 2001Staff reduction in 200140 % Management staff reduction40 % Management staff reduction

CFRCFR FREIGHTFREIGHT PASSEPASSENGERSNGERS

SAASAAFF

SMFSMF TOTALTOTAL

TOTAL TOTAL STAFFSTAFF

48.81548.815 29.05029.050 23.70323.703 412412 2.7092.709 104.689104.689

STAFF STAFF REDUCREDUCTIONTION

3.6933.693 2.1342.134 1.5161.516 2121 2121 7.3857.385

%% 7,507,50 7,307,30 6,396,39 5,105,10 0,780,78 7,05 7,05

Staff reduction in 2002Staff reduction in 2002CFRCFR FREIGHTFREIGHT PASSEPASSE

NGERSNGERSSAASAAFF

SMFSMF TOTALTOTAL


45.12245.122 26.91626.916 22.18722.187 391391 2.6882.688 97.30497.304


4.9004.900 2.3162.316 3.5003.500 141141 1010 10.86010.860

%% 10,8010,80 8,608,60 16,2016,20 36,0636,06 0,300,30 11,16 11,16

Staff reduction in 2002Staff reduction in 2002CFRCFR FREIGHTFREIGHT PASSEPASSE

NGERSNGERSSAASAAFF

SMFSMF TOTALTOTAL


45.12245.122 26.91626.916 22.18722.187 391391 2.6882.688 97.30497.304


4.9004.900 2.3162.316 3.5003.500 141141 1010 10.86010.860

%% 10,8010,80 8,608,60 16,2016,20 36,0636,06 0,300,30 11,1611,16

19981998 20002000 20012001 20022002106.000106.000 104.600104.600 97.30497.304 88.44488.444

202244 197698

178820

155678

133201

106000 10460097304

185362

105200

141027 137139

88444

0

50000

100000

150000

200000

250000

empl

oyee

s

employees 202244 197698 185362 178820 155678 141027 137139 133201 106000 105200 104600 97304 88444

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

~ 97.000 EMPLOYEES LESS 97.000 EMPLOYEES LESS

Personnel Evolution

Outsourcing

Outsourcing

&&

Privatization

Privatization

2 RepairsCompanies forHeavy Track

Machines

5 ProductionCompanies

for Signaling


for Signaling


for Signaling


for Signaling

NationalNationalRailwayRailwayCompanyCompany

Railways Branches

Rail WeldingCompany

Signaling Equipment

(5 branches)

Overhaul ofHeavy Track

Machines(2 branches)

PrintingActivities

Engineering &Design

TO BE PRIVATIZEDTO BE PRIVATIZED

2 RailcarsWashing

CompaniesFreightFreightCompanyCompany

Railways Branches

RailcarsWashing

Companies(2 branches)

Container Distribution

by tracks

TransshipmentRailcars

Maintenance& Overhaulof Railcars

Maintenance& OverhaulLocomotives

TO BE PRIVATIZEDTO BE PRIVATIZED

4 Maintenance& Overhaul

Coaches Company


Coaches Company


Coaches Company

PassengersPassengersCompanyCompany

Railways Branches

Sleeping &Restaurant

CoachesOperations

Maintenance& Overhaulof Coaches

(4 branches)

TicketsDistribution Maintenance

& Overhaulof LocomotivesTO BE PRIVATIZEDTO BE PRIVATIZED

Reform of the financial & accounting Reform of the financial & accounting systemsystem

5.000.000 Euro project for the restructuring of cost 5.000.000 Euro project for the restructuring of cost control, financial and accounting systemcontrol, financial and accounting system

Deadline: June 2003Deadline: June 2003

ObjectivesObjectives– New structure of Profit and Cost CentersNew structure of Profit and Cost Centers– Definition of the cost of each activityDefinition of the cost of each activity– New business plansNew business plans– Improved access charge formulaImproved access charge formula

Railway Infrastructure ManagementRolling Stock ManagementTrain Circulation Planning and

MonitoringFreight Operations & Commercial

Management

$ 35 Million$ 35 Million BudgetBudget

IRISIntegrated Railway Information System

PRIVATIZATION PRIVATIZATION OF FREIGHT RAILWAYS COMPANY (1)OF FREIGHT RAILWAYS COMPANY (1)

How to privatize the Romanian Railroad (maximize How to privatize the Romanian Railroad (maximize purchase price, minimize impact on employment, purchase price, minimize impact on employment, retain regulatory control, preserve local ownership retain regulatory control, preserve local ownership interest, etc.)interest, etc.)

Continuation of reform actions (access fee, staff Continuation of reform actions (access fee, staff dimension, fleet structure, cost control)dimension, fleet structure, cost control)

Information on the market about the offer for Information on the market about the offer for privatizationprivatization

Sale process (procedure, timetable, performance Sale process (procedure, timetable, performance guaranties)guaranties)

Due diligence (data room, commercial inf., Due diligence (data room, commercial inf., financial inf., assets, relevant contracts)financial inf., assets, relevant contracts)

Final bid (price, commitment to execute the final Final bid (price, commitment to execute the final contract, bid bond, minimum bid ?, open bid ?)contract, bid bond, minimum bid ?, open bid ?)

Selection & closingSelection & closing Post-closing (transition duties, labor, government Post-closing (transition duties, labor, government

responsibilities, renegotiation of the contract ?)responsibilities, renegotiation of the contract ?)

Presumed term for privatization : 2004Presumed term for privatization : 2004

PRIVATIZATION PRIVATIZATION OF FREIGHT RAILWAYS COMPANY (2)OF FREIGHT RAILWAYS COMPANY (2)

NEW TRENDS IN ROMANIAN RAILWAYS REFORM

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