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European Commission - Press release

State aid: Commission opens in-depth investigation into support for Romanian rail freight operator CFR Marfa

Brussels, 18 December 2017

The European Commission has opened an in-depth investigation to assess whether debt write-offs by the Romanian state in favour of rail freight operator CFR Marfa, and the failure to collect debts from the company, have given the company an unfair advantage in breach of EU State aid rules.

Commissioner Margrethe Vestager, in charge of competition policy, said: "The rail freight market is an essential component of any economy's transport links. CFR Marfa is the incumbent in this market in Romania and has benefitted from the cancellation of public debts and the failure of public creditors to collect debts owed by it. We need to check whether a private investor would have acted in the same way as the public authorities did here and, if not, to assess whether these measures are compatible with EU State aid rules.”

CFR Marfa is the incumbent fully state-owned rail freight transport services provider in Romania. The company has been in economic difficulties for a number of years. It has a high level of debt, mainly towards the national social security and tax administration agencies, as well as towards the Romanian rail infrastructure manager CFR Infrastructure, which is also fully state-owned.

Unlike passenger rail transport, the freight rail transport market in Romania is highly competitive, with numerous private operators, some having gained considerable market share following liberalisation of the market in 2007. In March 2017, the Association of Romanian Private Rail Freight Operators filed a formal complaint with the Commission alleging that CFR Marfa had received State aid in breach of EU rules.

The Commission's investigation will be looking at:

  • a number of state support measures in favour of CFR Marfa concerning a debt-to-equity swap amounting to RON 1,669 million (around €360 million) in 2013;
  • the failure to collect, since at least 2010, of social security debts and outstanding taxes of CFR Marfa, and of debts towards CFR Infrastructure.

A state intervention in a company can be considered free of State aid within the meaning of EU rules when it's carried out at conditions that a private investor would have accepted. The Commission will now assess whether this was the case for CFR Marfa's public creditors or whether, on the contrary, the state intervention has given CFR Marfa a selective economic advantage over its competitors and constitutes State aid.

If the Commission were to conclude that CFR Marfa has received State aid, it would then assess whether this could be compatible with EU rules that authorise certain categories of aid.

CFR Marfa is a company in financial difficulties since at least 2009. EU State aid rules only allow a state intervention for a company in financial difficulty under specific conditions, requiring in particular that the company is subject to a sound restructuring plan ensuring its return to long-term viability and that the company contributes to the cost of restructuring.

The Commission will now investigate further to find out whether its initial concerns are confirmed or not. The opening of an investigation gives interested third parties the opportunity to submit comments. It does not prejudge the outcome of the investigation.



CFR Marfa was incorporated as a joint stock company on 1 October 1998, following the reorganisation of the Romanian Railways incumbent, Societatea Naţională Căile Ferate Române ("SN CFR"). CFR Marfa provides rail freight transport services of inter alia domestic coal, cement, chemical products, grain and oil, wood, salt and metals.

Under EU State aid rules, public interventions in favour of companies can be considered free of State aid when they are made on terms that a private operator would have accepted under market conditions (the market economy investor principle - MEIP). If this principle is not respected, the public interventions involve State aid within the meaning of Article 107 of the Treaty on the Functioning of the European Union, because they confer an economic advantage on the beneficiary that its competitors do not have.

A non-confidential version of this decision will be made available under case number SA.43549 in the State Aid Registeron the competition website once any confidentiality issues will have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly E-News


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