INTERVIEW/Sova:We will difficultly get through summer;CFRCalatori will not have enough cars to satisfy traffic

CFR Calatori national railway passenger corporation will not have enough cars this summer to meet the traveling need, especially to the seaside, given that from 1,200 cars in inventory, 400 were halted due to technical reasons, Transport Minister Lucian Sova told an interview for AGERPRES.

He highlighted that a tender procedure was kicked off concerning the acquisition of 100 Sageata Albastra (Blue Arrow) Desiro self-propelled railway cars, "though nothing will arrive for the summer season."

Sova says in the interview that 51 percent he believes that the liberalisation of the railway transport might bring about direct and immediate benefits to the public, but 49 percent he upholds the idea of preserving some advantages on the internal market, so that it can mature.

With regard to Metro Line 5 (Drumul Taberei) (Eroilor - Pantelimon e. n), the head of Transports says that, in an optimistic vision, the subway will be cleared for circulation in Drumul Taberei as of January 2019, but in a pessimistic view, "which is closer to reality", the date will be March 2019.

AGERPRES: Next year, the railway transport should be liberalised. Is Romania ready to switch to liberalisation or will it delay it again?

Lucian Sova: That is a very interesting question and I have been asking myself this since the beginning of my term, in the sense that I am caught as Ministry and as Minister, in a dilemma, whose answer, regardless of which it might be, is not perfect. Why am I saying this: on the one hand it is clear that we must support the legitimate interests of the railway company, of which we are a majority shareholder; and on the other hand I am aware that we represent the general interests of the citizens, at the Government level.

Given the situation that we found - and that I am struggling, along with the managers, to improve - there is a certain degree of dissatisfaction of the passengers concerning the quality of services that CFR Calatori is offering. On the other hand, we can presume, without any other grounds, that if important operators from Europe were to come after the liberalisation of the market, they could provide better quality services.

Most likely today, without it being a statement that defines a strategy, I'm rather inclined to thinking that the liberalisation should occur in the public interest, and the public interest is to have more and better trains, traveling quicker, something that is not currently happening. We would encourage - not only have we encouraged, I have also supported the efforts made by CFR Calatori - to modernize, to repair their park, so that they can deal with competition from other operators.

On the other hand, the Ministry's economic interest, through the transport company, would be to further preserve its market exclusivity in a way - and I'm not referring just to the state company, because, if the liberalisation didn't take place, we would basically preserve the exclusivity of the Romanian operators. And here we have a debt, because this state company, as well as the private ones, create jobs, circulate money throughout the country, pay their taxes in Romania and, from this perspective, there are arguments that support the idea that we should let the Romanian market mature.

In terms of percentages, I can say to a 51 percent extent that liberalisation would directly and immediately benefit passengers, whereas to a 49 percent extent I support the idea of preserving some advantages on the internal market, so that it can mature. Unfortunately, there was enough time and we cannot come with consistent arguments that this market and these companies have matured, given that their situation has worsened, rather than consolidated, in time.

AGERPRES: Lately, CFR Calatori has been confronted with a crisis concerning rolling stock, and passengers with overcrowding in train stations and the lack of seats on trains. Do you think that this situation will be remedied?

Lucian Sova: Unfortunately, the situation doesn't look good at all, in the sense that of 1,200 railway cars that CFR Calatori has in its park, in March as many as 400 of them were halted due to technical issues. No tender was done for repairing them, something that now has been done and repairs have commenced. Still, we will hardly get past this summer. Thankfully, the public's appetite for railway transport has increased. On the other hand, unfortunately, CFR Calatori is seriously conditioned, in the sense that it doesn't have enough railway cars and will not have enough for this summer, in order to meet the traveling need, especially to the seaside.

The company has in view - and a tender procedure for an agreement on the purchase of 100 Sageata Albastra Desiro self-propelled railway cars has been opened, though none of these will come in time for the summer season. We are expecting to have them in September - October. Repair works are being carried out, efforts are being made to manage this traffic with a little more than two thirds of the park's total which could have been exploited. Or they can try to optimize it, to bring in cars, but a third of the park missing means a lot. This summer, train stations will be crowded and so will ticket counters, unfortunately.

I would like to refer also to the lack of possibility for students to reserve their tickets online. It is a limitation generated by the fact that, in order to receive a free ticket, they must present some documents that we just cannot manage online.

AGERPRES: But have you taken into account a restriction concerning the number of free travels for students, especially because this facility has extended to those who are pursuing doctorates and master's degrees. Isn't that too much?

Lucian Sova: Everyone says so. This thing is based on a government decision and a public policy concerning the prioritization of aids, because this represents some sort of assistance for a certain target-audience. Of course that optimizations are expected, given that we need to support not only tourism, but to also support the access to education of students, and that should be a priority.

I am highlighting this aspect, following the discussions I have had with my cabinet colleagues, that there is a dissatisfaction and pending state on the public's part who pays for tickets, and sometimes, finds itself in the situation of either traveling in less desirable conditions, or not having access to a ticket when they want to, because these tickets are already taken by the those who benefit from this gratuity.

Otherwise, as a public policy, given that we address the young generation, it is better to encourage it to travel by train, rather than by car, be it personal or public transportation.

AGERPRES: The 100 trains that CFR Calatori will purchase, will they be new or used?

Lucian Sova: For financing to be accessible, they [the cars, e.n.] will be used, though with an exploitation period of 50 percent. Thus, with a functioning reserve of more than 50 percent. There are many offers for such trainsets but that we cannot take into consideration due to their length of use.

AGERPRES: Is there an estimated amount for these trainsets?

Lucian Sova: No, given that it is an operational lease and that 100 trainsets cannot be taken from one single place. Together with the financial backer solutions are being looked for. It will be a competitive procedure both with regard to the financing and to the train acquisition, but now offers are being gathered - we are backed here by one of the financiers, at least - they have a collaboration and open discussions with those with BCR [the Romanian Commercial Bank, e.n.], relying more on the relationship and the support that Erste grants in relation with Germany, where the largest range of such trainsets that can be accessed exists. But this does not stand for any limitation in relation to the moment when the financier is selected.

AGERPRES: What is the situation of CFR Marfa [the Freight Transport Railways, e.n.]'s debts towards CFR S.A?

Lucian Sova: They are being processed. There are procedures that a bailiff manages, some goods were impounded and taken out for sale. I have no detailed information, but I do know that it is a sales procedure of a large number of cars on the Romanian Goods Exchange, where some buildings have been advertised for sale. The accounts are controlled by the bailiff, in a reasonable manner, in the sense that incomes are carefully monitored and inputs are allowed by the Freight company, just enough so that it ensures its function in parameters that it can develop now. Other extravagances are not permitted by the bailiff.

I do not have a real time situation of how much has been recovered, all I know is that there is nothing spectacular there, but, given that these procedures have barely begun two months ago, I am not expecting any spectacular aspects, because exploitation income, I know fully well from the information that was given to me by those from the company, from the Administration Council, or the CEO, that they barely have enough to refinance themselves. So we have expectations, from the bailiff, through the means of valorization or goods, something that, in my opinion, is morally wrong, but it is legal, because the freight company worked, produced losses. Now the bailiff comes along, recovers some goods, that generically speaking, were the people's, even if they are the private property of the company, they valorize them as collateral for some debts, debts that were actually made upon the way the company worked, whether there were sub-cost offers and commercial partners benefited from them, whether because salaries were paid, I cannot say that this was moral.

AGERPRES: But if we sell their cars won't we drive them towards bankruptcy?

Lucian Sova: They have a huge park of cars that they do not use anymore and can only be sold exclusively for junk, so that we do not encourage the unlawful competition of some operators, although not even this is 100 percent moral, but upon the talks that I have with the bailiff, the management, the Board, I supported the idea, without having a direct prerogative, but as promoting some policies that I am responsible of, I drew their attention so that they do not affect the current activity or that some elements that could be beneficial to the company's development. It has enough heritage that it does not use, for which it pays taxes and that can be valorized, and if the law says so - the Law of Finance and Fiscal Code - these things need to be done.

AGERPRES: Do you have a strategy with CFR Marfa? Will you render it private, will you shut it down? Will it remain in the state's responsibility? Given its potential as a strategic company for freight transport?

Lucian Sova: For now I am the prisoner of a short term strategy, given that we have to wait for a decision concerning capitalization of CFR Marfa, a decision that sits on DG Competition, after the signals that I have, it will rather go towards an unfavorable solution of CFR Marfa and I am channelling all my efforts in order to be prepared and to be ready for what is worse, namely an unfavorable solution, a situation which most likely, this company will have to take measures in order to see the return of the consideration of that transaction, which is huge, something that could lead to it declaring its own bankruptcy. I do not wish that in this situation for CFR Marfa's partners to be affected - or to be affected as few as possible, and of course, the most important partner is CFR SA, which is why I supported accelerating the execution order and recovering as much as possible from the debt, so that we will not have a domino effect and for CFR SA to go into deficit, into collapse.

AGERPRES: What is the situation with the World Bank and Bucuresti-Ploiesti highway?

Lucian Sova: There is a workgroup at the level of the Transport Ministry, which held discussions with representatives of the World Bank concerning a financial arrangement, worth approximately 35 million Euro, that will support making a new feasibility study for the route of this highway, especially on the mountain side of it, and strengthening the administrative capacity of the ministry and the road company, which means an expense dedicated to modernizing human resource. I stress that there is no written accord at this time, though I have to admit that there were consistent technical discussions with World Bank representatives. I do not claim that this solution was not a good one. But, given that this project was chosen at a Government level, and that this project to be introduced in the project package which will be offered to private partners - therefore the strategy of including itself in a public-private partnership (PPP ed. n) and this segment of highway - consequence that this decision was taken at a government level, we chose the solution for completing the feasibility study and to be included within the package, which will be offered on a competitive procedure towards a private partner, something that we know will shorten terms, will produce savings - still we are talking about a loan. Of course that in perspective I know that this loan will be reimbursed from European funds, but until these activities we know that a deal with the World Bank, worth 35 million Euro, would have been included in the budget deficit.

So, from this perspective, I, as a representative of the Transport Ministry, have stated my position, in the sense that it is not the only solution, but there are others, and at the Finance Ministry level the right demarches were taken in this sense.

I repeat, I am sorry that this got into the media, not because it was a secret, but the point we are at, and were, was a point at which we had chosen a strategy. I, during the committee meeting in Sinaia, was very open towards my MP colleagues and I informed concerning this aspect the wish to debate it, not to pass a sentence, and, in a civilized manner, we should have debated in Sinaia - and it happened and there were pros and cons, something that for me was important, speaking of the way I will manage this issue, and later the procedures chosen by the Government to develop in an equally friendly manner, just as opened, as it was until now, with partners from the Bank, in the proposed sense. The thirst for sensational made us reach a situation which I regret, namely that the World Bank to say, rightly so, that it heard about it in the media. They heard it from the media, not from the mouth of the Transport minister, and not as a press statement made by the Transport Minister. I repeat, this was no secret, but we were still in a debate stage.

Of course the Finance Ministry fulfills the corresponding dialogue procedures, or presenting motivations, of the back-up that we appreciate as being proper, in the sense of not developing this project. Not for shutting it down, not to cancel it. Just to not develop talks that could have led to signing an international accord, because such an accord has an international nature, with validation on behalf of Romania's president, with approval in Parliament, etc.

AGERPRES: When do you think that we will able to travel via subway in Drumul Taberei?

Lucian Sova: The optimistic vision is January 2019, the pessimistic vision, which is closer to reality, but also to my own pessimistic side, rather than optimistic, when talking deadlines, is in the course of March, although tests will begin at the end of December or immediately in January, though there is a conditioning concerning fitting the safety system that is still in a blocked tender concerning some complaints. I appreciate that this will be closed in the third trimester. Basically, there is one offering party - it is quasi absurd situation that someone who has not taken part in a tender to file a complaint - behold that the economic liberties of Romania are quite broad - to make a complaint, and the court to allow the complaint to to evaluate it. Now, I hope that disfunctionalities did not occur in the procedure done until this moment so that we need to redo the tender.

AGERPRES: What is the stage of works for Straulesti depot?

Lucian Sova: It is basically ready, the depot and the so-called park&ride. At the end of June the works will be over, the reception procedures start in July, the park&ride component I believe that at the end of July - beginning of August, will be used in the sense that anyone who wishes will be able to park their cars there. There will probably be a period of a month or two until an operator will be identified, so as to undertake the concession and the auto-station component, and associated services - but for me it is a priority that as soon as the parking can be used it should be used - it is about fitting it with specific equipment that monitor time, establishing tariffs, putting in the line of work of Metrorex of this activity, because, today, Metrorex does not have this line of work, to manage a parking lot, something that occurs going through the procedural stages: The General Assembly of Shareholders (AGA ed .n), Administration Council, Trade Registry. There are some formalities that we hold on to.

AGERPRES: You said, in Parliament, that in the case of the new Henri Coanda airport terminal, the investment will rise to one billion Euro. What will be the source of financing?

Lucian Sova: This billion is a projection. Just as we conceived this project, it can be done in phases, in the sense that we are taking into consideration developing a new terminal, which is composed of several modules - I believe three or four - which can be successively built. The airport is bankable, we have the European Bank of Investment's option, of co-financing this project. It is considered, at least until today - its development through loans, given that the airport cannot apply, given the rules of competition on European funds, being a large airport, with a high number of passengers. Small, provincial airports, are barely able to convince the European Union to finance development elements of the terminals or runways, which is not the case for Henri Coanda. Yet Henri Coanda has any perspective it wishes, concerning the financing of this new project.

AGERPRES: In 2020 how will we ensure Otopeni - Gara de Nord link?

Lucian Sova: I took it upon myself - and I cannot perceive it any other way - those from CFR SA to finish the railway towards the airport. I even asked them to focus on - which they have done by the way - on doubling the railway line and developing the segment towards the airport of the railway line, with its own resources, and this because I wish to avoid the risk of blocking in public acquisition procedures for works, yet we will not avoid these procedures for digging tunnels underneath the DN1 national road, given the fact that we do not want to create traffic issues on DN1. Those from the company informed me that there is technology that can make this tunnel in a non-destructive manner, so not like the cut&cover model, which means to make the hole, and then putting a lid on top of it, situation which would have led to problems for the DN1 traffic. For the tunnel they will probably apply and develop an auction procedure, and for the rest they will develop it with their own resources.

I told them that if the mountain railway line from Bumbesti-Livezeni could have been built, several decades ago, a few kilometers of railway line we should be able to build with our own resources and with the technology that CFR SA has. I have faith that we will not be stuck in the auction for this tunnel.

And more importantly, in lieu of recent talks that I had with those from the Intermediary Organism for Transport, we can access European Funds for financing this project, which is not that large. It would be around 50 million Euro, made very well, including a train station of reasonable sizes.

Still, because in Romania things occur in a slightly more unhappy manner, rather than a happy one, we are prepared to make transport up to the Otopeni station, in Otopeni Halt, which we will modernize - something that CFR S.A is looking at - and to ensure a shuttle bus between the airport and this halt. This is basically an option that I am not excluding, because it is not right to exclude what could be worse, but I am extremely determined and support all efforts and to monitor all efforts that those of CFR S.A are making, in a thorough manner, of good quality and in time the link from the airport via railway, with a station within the airport's perimeter.

AGERPRES: Is there still a risk of disengagement on European Funds?

Lucian Sova: No. The Transport Ministry, looking at it retrospectively, has the highest volume of funds drawn by the European Commission, second to the Ministry of Agriculture, which, certainly, is managing subsidies and it is their merit that they manage it efficiently - because such things didn't always occur - unlike other programs that presume procedures of public acquisition, project development, applicants, etc.

There are 850 million Euro drawn already, there are projects in various stages, but some very, very advanced, such as the Metro line 6, the subway line that will make the connection with the airport, where we have expectations that in a few weeks to receive the approval of the European Commission for this project, which is worth 1 billion Euro. There are other large projects as well.

I say it wholeheartedly: There is no risk, we are on the assumed schedule by the Intermediary Organism concerning the absorption and settlement of trimestrial European funds, assumed to the Ministry of European Funds, we are on course with this as well.

AGERPRES: What sums could be settled this year from the European Commission on infrastructure projects?

Lucian Sova: There are 800 million euro that could be settled this year from construction sites where there are less than 2,000 workers, of which over 600 are for only one entrepreneur, and a very low number of equipment. Unfortunately, I cannot not take into consideration the fact that on the thirteen construction sites of highways we are advancing at a snail's pace, although at the Ministry's and Company's level (National Company for Road Infrastructure Administration), we have made all efforts and reached the proposed objectives - that of eliminating administrative barriers in the way of contractors. The weakness of the companies that won these auctions I cannot say that it is not noticeable and it worries me that the fact that the same companies are fighting over the tenders that are still ongoing and contest themselves and we sit around, with the projects on hold. It is their legitimate right, but I cannot look on it with trust, to an entrepreneur that applied for a few other segments of highway and is not able to finish the segments for which he is currently on. Even worse for the two lots on Sebes-Turda, where, although the highway seems that it is ready, it is not, because it cannot be received, and not due to extravagant reasons, to call it that, although correct, legally speaking, that a door knob is missing for a maintenance center, but because, as evaluations are being made, concerning the perspective of the asphalt's quality, for example for one of the lots, the results are not very encouraging. And, if it were difference, despite all the people say, and from all that are sending video clips done from their drones, we would have received a notification on behalf of the entrepreneurs to present ourselves to the reception.

On June 21 the term expired for handing over Lot 4 and we received no notification. If someone were to look closely, they will see that for a lot there are more detailed checks done, on the other lot embankments are being repaired, so there are still works - and it is not bothering anyone, and, on top of it all, we pray to them to make the necessary documentation and to get their money. Paradoxically, but I cannot look away from this - and I am trying as much as possible to promote it in the public perspective - because, if in the past there were reasons that were imputable to the beneficiary, concerning creating work fronts for entrepreneurs, today and in the last few months this does not exist.

I am also very worried concerning finishing the highway segment of A3, which needs to make the junction with Bucharest, where, although I have been there often, I talked with the entrepreneurs, although I asked them what else they wanted - money, other formalities - they told me that they do not want anything else anymore, they say that in October they will hand over the work and there are still several dozens of people still working. Today even, having the term until October, I cannot apply penalties, but I am not happy when I think that in October I have to announce that we have to begin the procedures for applying penalties, and we still do not have a highway.

Though, on the other side, this conduit modification, at the Ministry's level and myself's, because unlike other ministers I am very thorough concerning these aspects and demanding and I monitor in an independent monitor, so to speak, the activities, in the sense that that I do this monitoring either directly, or through the four state secretaries, and each of them have responsibility on a segment of highway, under construction and go and talk with entrepreneurs, local authorities, sub-contractors, providers - I know every two weeks the evolution, to a meter, of each of the construction sites and ask them (the entrepreneurs ed. n) and we make them write and to sign if they have any other expectations from the beneficiary - I am referring to responsibilities on behalf of the Road Company or even the Ministry itself - if we refer to normative acts of expropriation, technical-economic terms. They write that they do not have, but when we look at the few workers who work we look at the clock and we should prepare the termination contracts, or the penalty ones. Romanians we will be happy, knowing that now we have claims that we wait for, we wait for them to be solved in court in a year or two, if these entrepreneurs pay for damages.The situation is extremely serious and not only did we bring it to attention, we asked for support, had meetings with entrepreneurs during my first month since I took on the term for the Transport Committee, we also had them at the Ministry, along with Rovana Plumb, I informed the Committee. Of course, this Committee should make laws and make laws as well as possible in order to easily implement these projects.

I took measures at the level of the Intermediary Body, in the sense of issuing a series of instructions that will come to welcome the needs of entrepreneurs. One of these, for example, makes reference to the assemblies, materials that they have in construction sites, they try them out because they have them, they are destined for doing works, in order to add them to the settlement before starting works, in order to ease the activity, at least in the perspective of financial support. There is nothing left for us to do but to go out, one day a week, Saturday, to do volunteer work with the Ministry's employees, at least on the A3 highway. It would probably suit us, but to work in the place of internationally acclaimed entrepreneurs, that take money for these projects, at an international standard, although they have no work force... I ask myself: I wonder how many of them pay for workforce, because if one kilometer of highway costs as much as one does in Greece, I believe that the worker who works on this highway should be paid as the worker, maybe Romanian as well, that works in Greece. I suspect that this does not happen and this is actually the explanation for which the performance of the entrepreneur is very low in Romania; because they are cheap when it comes to workforce.

AGERPRES: Under these circumstances, I am addressing you this question, often heard: How many kilometers of highway do you estimate that you can use at the end of the year?

Lucian Sova: I will tell you very honestly: Any deadline I would give - and I have seen this for myself - I assumed in a discussion, but I officially assumed, that I estimate that during the month of May we will have both lots. You know what happened the second day? I introduced a state of comfort for the entrepreneurs. "You said that during May. You will be in political distress if you do not take the lots in May". And I replied "Are you ready?" "No, but you change the law, you said that you will take it in May" "No! I said that in May, that's it. I had a hope, I will assume this politically, but I will not back away from quality". This is why I no longer give out deadlines, not because I would be afraid of them. Basically, as things are evolving, in the sense that from week to week, from month to month, there are progresses registered on some segments, the target of 60 kilometers which I talked about I am still maintaining, but, unfortunately, what is more serious is that I am not the prisoner of this statement in relation to the public, with the electorate, with the other parties, but this statement makes me vulnerable in the relationship I have with the entrepreneurs, that it induces them a state of calm. The Minister said that he will take my lot. Take it, he can't afford not to take it, to be publicly blamed for not taking it. I come along and say "yes, blame me publicly, but that lot is no good and as long as it is not good, I will not take it, as long as I am the Minister!

AGERPRES: How do you see the solution to this situation with entrepreneurs and the workforce?

Lucian Sova: It is very clear that for other contracts their clauses will have to be made more consistent and placed, foremost, concerning that which entrepreneurs are assuming, because entrepreneurs, if we look at the work assignments and the offers that they made towards eligibility, to a technical capacity, they added their own turnovers there, on a European plan, the machines that they probably have through Europe, and in Romania they came with nothing. They're gone, not even to subcontractors, most of the times, but directly to providers, small companies, with little capabilities, fluid and just like business: Now they are, now they are not.

We must introduce conditions concerning the presentation of the machine park, this is something you can prove, not to mention the work contracts, and upon signing the contract I need to see that you have these things. About these I talked it over with the Road Company and we will introduce these conditions. I hope that they will not be challenged in court, because anyone is free, at any time, to appeal to the court, to put in the specifications a certain degree of technical competition, that you can prove, based on papers and then and only then we will be able to see... We see for decades that we don't have enough spectacular machines, brought by large entrepreneurs, from countries where we saw prestigious constructions, with a locally sourced work force, which, of course, has its own limits, given that it is under-financed, because it is the prisoner of subcontractors that entrepreneurs do. We say "We want quality!" and we put in difficult conditions of eligibility, only a few will qualify, and of those few will make the law concerning the construction market, and the Romanians entrepreneurs look on upon this and simply cannot break this ice lid. Here something needs to be changed and I am doing something regarding this.

AGERPRES: What happens with National Company for Road Investments (CNIR), after the emergency ordinance was declared unconstitutional?

Lucian Sova: The Emergency Ordinance is in effect. We crossed this period, not of incertitude, but more likely a reserve, concerning the situation, which is almost unpredictable, because on one side it was clear that the approval draft suffered significant modifications in the Chamber, as opposed to the form which was initiated by the Senate, the fact that it was declared unconstitutional, for reason that it was an emergency ordinance and it created somewhat discomfort for us. I will not deny that I propose to myself to better evaluate, if I have a minimum legal support, but consistent, in the sense of making it operational, I will do it. And I will do this thing, if I could, by creating a minimum personal structure, through taking on a certain project of such a manner, that if a new company were to be developed, it should develop in a natural manner, to attract quality workforce resources and to have the role of a project company, in the sense that if we have a highway to make, we should take over the establishment, to fulfill all formalities concerning the acquisition of feasibility studies, activities concerning the environment accord, the construction auction, which could show a new way of approach of infrastructure projects in Romania. Yet, now I propose a smaller step. I would be very glad that until the end of the year, to manage a project, with this company, for example a segment from the Moldavia segment, which will be clean.
It does not work now. Legally speaking, it exists, it has no management, no balance sheets. It is like any other company with a suspended activity. I do not propose that I sit around and look at it, until the end of the time. AGERPRES (RO - author: Oana Tilica editor: Andreea Marinescu EN - author: Catalin Cristian Trandafir)