Romania decided to launch a new state rail freight operator instead, Carpatica Feroviar. The new company was supposed to fill the gaps left by CFR Marfă.

However, the Romanian government has employed some questionable tactics to reduce the financial pain from a Marfă bankruptcy. The idea seems to be that Carpatica Feroviar, with an initial state-funded capitalisation, takes over CFR Marfă assets, which then pays off its outstanding debts with it.

The money has come full circle

OPSFPR is highly critical of this working method. It highlights the 300 million euro capitalisation of Carpatica Feroviar for operational expenses and the acquisition of obsolete rolling stock of CFR Marfă, which it then uses in remarkable ways: “The new state operator is leasing the rolling stock recently purchased from CFR Marfă to…CFR Marfă. It seems like a new business model”, association head Simona Istrate states.

Istrate suggests that this is in effect a new type of state aid: “We are not aware of any SGEI entrustment, but we have become accustomed to surprises of all kinds.” SGEI is an EU policy package that defines the conditions for legal state aid.

“There can be no discussion of a ‘reset’, but of an internal rotation of assets and risks within the public sector, with the aim of circumventing the 2020 DG Competition Decision on the recovery of illegal state aid granted to CFR Marfă.” OPSFPR says it will continue to report deviations from competition rules to EU institutions.

The primary issue with constantly changing TSIs is that it brings a seemingly endless list of imposed expenses to rail companies. “We must be realistic about the fact that there are financial restrictions and organisations have limited capacity to tackle every digitalisation ambition of the European Commission, even with European funding”, notes Miguel Rebelo de Sousa, executive director of the Portuguese rail association APEF.

Financial risk of changing TSIs

Oliver Smock, policy advisor at the German rail freight association Die Güterbahnen, concurs with that idea. “Frequent TSI updates […] heighten financial risks”, he says.

“Vehicles recently equipped with costly new technologies may need to be retrofitted again within just a few years. The combined cost of equipment, engineering, technicians, vehicle downtimes, and authorisation processes is substantial. This financial uncertainty discourages investment in railway undertakings and undermines the intermodal competitiveness of rail freight”, Smock explains.

The often-changing TSIs provide an even bigger obstacle for those operating internationally: not each country implements newly mandated trackside systems at the same time, meaning that international interoperability suffers, and costs increase.

Cost control

Those costs are a major headache for rail companies, so Gherghinescu’s words seem to have made the European rail freight sector very happy. “Finally someone who understands”, says Dutch rail freight association director Hans-Willem Vroon. “Cost control is an absolute necessity. No one benefits from unaffordable innovation, except those who profit from it and have turned it into a hobby that is paid for by taxpayers. The focus must be on realising customer value and facilitating competitive transport.”

Vroon’s Romanian counterpart from association OPSFPR, Simona Istrate, concurs and highlights the difficulty for countries with outdated infrastructure and limited budgets. “Regulatory stability helps with planning and investment, while frequent revisions can block or delay projects”, she says.

An obstacle to innovation

At the same time, won’t a TSI freeze hinder innovation? After all, if old technologies are mandated, there is no room for technological advancements. Respondents do not have any major concerns about this.

“Technological development often outpaces what is feasible in the railway sector, where retrofitting vehicles and infrastructure is a long and complex process”, explains Oliver Smock. For instance, First-of-Class development often takes multiple years before full fleet retrofitting can even begin. Longer freeze cycles would allow time for new technologies to be thoroughly tested and would help prevent shortages by giving manufacturers enough time to scale up production efficiently”, he adds.

However, the success of frozen TSIs may not be as easily achieved as it seems. One respondent, who wishes to remain anonymous, points out that there are some conditions that TSI freezes need to meet: they have to be tailored to the TSI in question, and be consensual.

Different TSIs, different freezing periods

“Some technical TSIs, for example, WAG [rolling stock and freight wagons] TSI, would benefit from a longer validity without changes, 5 years could probably be optimal”, the respondent explains. “But, freezing is possible only after an absolute consensus of all parties interested, the stakeholders. This would also present some certainty for the producers, manufacturers of the vehicles.”

A five-year freeze may not always be the right approach. “However, other TSIs, such as the Telematics TSI, should stay as it is, that is 3 years, in particular because the progress in the IT area is very fast and a longer period might hinder the introduction of innovations.”, the respondent adds.

Despite these side notes, the message remains clear: European rail freight is overwhelmingly positive about Gherghinescu’s aim to reduce costs for the industry. What’s more, innovation outpaces the speed of implementation, so market parties consider it better to pause mandated tech changes for multiple years.

That, however, may require a mindset change in Brussels: “Some of our members have expressed concerns that these [TSI] revisions are becoming an end in themselves”, comments Oliver Smock. What the EU needs could be a better eye for stakeholders’ concerns.

Based on the above data, nearly half of all freight trains in the Netherlands (those in the 601 to 1,600 bracket in 2025) would see their TACs grow by around 44%. Heavier freight trains, between 1,601 and 3,200 tonnes in 2025, would be subject to a 19% increase. Those are big jumps. However, the bad news does not end there: Traction prices for electricity will also increase by around 41%.

There is, despite the bad news, also an upside to the story: parking and shunting fees will shrink by 13% to 43%, rail freight association RailGood points out on LinkedIn.

But alas, there is a setback for rail freight here too. Intermodal operators will have to start paying almost three times as much in annual rent for long non-electrified sidings, where they set up their spare sets of wagons. “Spare sets are needed to cope with the dynamics of the transport chain and provide customers with a still somewhat acceptable delivery time and reliability”, RailGood elaborates. “That is necessary because of the many works and infrastructure disruptions on the railways.” And what’s more, the Dutch infrastructure ministry will also stop its subsidies on these infrastructure fees from 2026 onwards.

There might be a good reason for these growing charges. After all, infrastructure managers need money to maintain and improve the rail network. However, RailGood does not see any qualitative improvement, which is reasonably to be expected. Besides the growing TACs, the association also condemns the still exorbitantly high parking and shunting fees, which are not nearly seen at similar levels in Germany and Belgium, even with the planned fee reductions.

Crucially, there is a real risk that poor performance and high prices will lead rail freight to lose out to other modes of transportation: the notorious reverse modal shift. Despite that, there does not seem to be much interest on the side of the Dutch authorities, be it parliament or the ministry, to really invest in rail freight.

That is incomprehensible to RailGood: “Government parties feel there is no budget to reduce infrastructure charges for rail freight. There is money for everything, including at the Ministry of Infrastructure, but not for this.” Notably, the ministry decided to invest one billion euros in a highway from the Port of Rotterdam to Germany.

The Romanian experience

It is clear that the rail freight sector suffers from the soaring infrastructure charges. However, in the long run, it may very well have negative repercussions for the infrastructure manager itself as well. For example, Romania’s infrastructure CFR hiked infrastructure charges at a somewhat similar pace during the past couple of years.

TACs grew by 8% in 2023 and another 15% in 2024. Other service fees, such as shunting and parking, rose by up to 65% on 1 April 2025. In other words, the average rail operator could be paying 33,000 euros per month in fees in 2025, as opposed to 20,000 euros in 2024.

OPSFPR, the private rail freight association in Romania, concluded that the charge increases backfired on CFR. The infrastructure manager saw its March 2025 TAC revenues drop by more than 1,3 million euros compared to March 2023. The conclusion was that there is no long-term gain from these hikes, even if short-term revenue grows.

TACs are the protagonist in this case. They grew by 8% in 2023 and another 15% in 2024 in Romania. Other service fees, such as shunting and parking, rose by up to 65% on 1 April 2025. In other words, the average rail operator could be paying 33,000 euros per month in fees in 2025, as opposed to 20,000 euros in 2024.

These hikes seem to have backfired on the infrastructure manager, CFR. It saw its March 2025 revenues from track access charges drop by more than 1,3 million euros compared to March 2023. The conclusion is that there is no long-term gain, even if short-term revenue grows, writes Romanian publication Club Feroviar.

No investigation into the matter has been concluded. Nevertheless, OPSFPR mentions some well-known issues in the Romanian rail sector as underlying factors for the crash: A lack of funding, disinterest from authorities, and the subsequent deterioration of infrastructure.

Austro-Hungarian Empire infrastructure

“The railway employers’ association firmly draws attention to the serious degradation of the railway infrastructure in Romania, a situation that calls into question the safety of passengers and freight transport”, the association says. “The chronic lack of funds allocated to maintenance, combined with the negligence and disinterest of the authorities, has transformed train travel into a veritable lottery with the lives of citizens.”

The Romanian rail infrastructure is outdated, leading to frequent incidents on the network: “[…] in many regions people still travel on lines built during the Austro-Hungarian Empire, which have not been properly modernized for more than a century. This state of affairs can no longer be tolerated”, says OPSFPR, highlighting the impact on safety and competitiveness of rail freight.

Lack of interest from the ministry

“The lack of interest of the Ministry of Transport for railway transport is seen and felt daily. The lack of investment and the delay in rehabilitation works have created a disastrous situation, which endangers not only the safety of citizens, but also the future of this vital sector for the national economy”, the association concludes.

Now, Romania is supposedly planning to give Carpatica Feroviar the money needed to buy assets from CFR Marfă. The latter can then use that money to pay off the illegal state aid it still needs to return. In essence, the company would be returning public money… using public money.

Romanian rail turns to the EU

Private Romanian rail association OPSFPR has had enough of it. The organisation says that it has lodged a complaint against Romanian at the EU, which concerns “the Romanian state’s failure to comply with its obligations regarding the recovery of incompatible state aid granted to CFR Marfă, as well as the obvious attempt to circumvent European provisions by establishing the company Carpatica Feroviar România.”

“Specifically, OPSFPR complains to the European Commission about the Romanian state’s intention to use public money intended for the capitalisation of Carpatica Feroviar România to purchase rolling stock and other assets from CFR Marfă”, it elaborates.

Playing around with the rules

In so doing, the association wants to make clear to the Commission that Romania is playing around with the rules: “OPSFPR draws attention to the clear intention of the Romanian authorities to circumvent the provisions of the European Commission, by establishing and capitalising the company Carpatica Feroviar România, to which the viable assets of CFR Marfă will be transferred through a non-transparent and non-competitive procedure.”

If Carpatica Feroviar gets preferential access to CFR Marfă assets, private parties are not getting a fair chance at competing in a public tender, OPSFPR points out. It calls it “a serious threat to the integrity of the international market of the European Union.” The Romanian authorities have not responded to appeals from the association, OPSFPR says.

Unsurprisingly, market parties are rather dissatisfied with how things are going. They now want to establish an advisory body that has the ear of the transport ministry, according to Romanian publication Club Feroviar. Such a body could give the sector the opportunity to impact policy-making and bring much-needed improvements.

Best practices

The council is supposed to facilitate consultation with specialists from the private sector, academics and research centres. The hope is that it will lead to efficient solutions, for example to reduce bottlenecks.

OPSFPR says that Romania needs to take various steps to improve the quality of rail. Infrastructure needs to get a boost, with fewer speed restrictions. Bucharest needs to renew legislation, with simplified regulations, fewer bureaucratic barriers and the adoption of European best practices. Lastly, it calls for an investigation into infrastructure manager CFR’s expenditures in order to reduce waste.

The 300 million euros increase proposed in the draft law should be used by CF to purchase assets from its predecessor, she claimed. These include “locomotives, wagons, fixed assets, inventory items, land and buildings necessary for the maintenance and repair of rolling stock purchased directly from CFR Marfă”.

This measure represents a new illegal state aid, this time benefiting CF. This transfer will circumvent the principle of economic discontinuity.

In other words, Romanian authorities are trying “to get rid of the provisions of the European Commission, which in 2020 issued the decision to recover the illegal state aid granted to CFR Marfă”, Istrate said. This is highlighted by the fact that the draft law states that CF will take over CFR Marfă’s transport contracts as well, she pointed out.

From CFR Marfă to Carpatica Feroviar Romania

CFR Marfă’s last profitable year was 2007. The official liquidation is scheduled for March next year, once CF is expected to start operations. However CF needs to first acquire rolling stock. According to Istrate, this process should have been carried out through a public tender, but the new draft law seems to say otherwise. “The rail freight community is concerned about this new approach”, she stressed.

What is happening in Romania is quite similar to the situation in France, despite the paths being slightly different. In both cases, the state-owned rail freight operators have been discontinued and will be replaced by new entities. However, the new companies replacing French Fret SNCF will lose 20 per cent of the volumes, which were distributed among private operators. In Romania, the replacement seems to be coming with no consequences.

“In this scenario, private operators remain the only ones affected by the non-implementation of the recovery decision and the Romanian rail freight market continues to suffer the consequences of the same unfair practices, by setting up this rudimentary and completely unlawful mechanism proposed by the Romanian authorities”, Istrate concluded.

However, in order to start operations, Carpatica Feroviar needs rolling stock. And that rolling stock is supposed to come from no other company than the company it is supposed to replace, CFR Marfă. Apostolache announced that the CF will acquire 200 locomotives and 6,500 freight wagons from the current state operator.

Public tender is the only legal option

Simona Istrate, director of Romania’s private rail association OPSFPR, explained to RailFreight.com that legally, CF should acquire the rolling stock through a public tender. It raises the question of how it is already known beforehand which rolling stock CF stands to gain.

“The figures circulating probably refer to rolling stock fit for traffic”, explains Istrate. CF should acquire those locomotives and wagons through a public procedure, which “would probably be the only solution for economic discontinuity”, she says. “The takeover of even a single locomotive from CFR Marfă can only be done on the basis of a public tender, and the takeover by the new company through lease or bailment would be illegal.”

Multi-billion euro debt

If not through a public procedure, “the Commission will consider that CF is the economic successor of CFR Marfă”, says the OPSFPR director. Were that to happen, it would also judicially take on CFR Marfă’s multi-billion euro debt, which is the reason why Romania needs a new operator in the first place. “We can expect a series of legal fireworks”, Istrate comments.

Romania seems to be treading a fine line, legally speaking. It remains unclear how CF will acquire the CFR Marfă rolling stock in compliance with the law and without being seen as the company’s successor. Simona Istrate floats the idea that, hypothetically, a public tender with CF as the only participant could take place.

Fraudulent maneuvers

The private Romanian rail sector does not seem to have a whole lot of confidence in the legality of the establishment of Carpatica Feroviar. “Our fears are related to the continuation of fraudulent maneuvers by government officials”, Istrate says.

“In a competitive market, it is incomprehensible how CFR Marfă still holds an operating license and is still allowed access to the railway infrastructure, given that it has enormous debts for the payment of the access fee to the infrastructure manager CFR. The rail freight operators in Romania want a simple fact: the certainty that they operate in a fair market and that the competition rules are properly applied.”

CFR Marfă’s last profitable year was 2007, 17 years ago. Since then, it has recorded loss after loss, which has inevitably led to the Romanian government having to bail the company out.

That in itself is not out of the ordinary. Government support for state-owned rail operators is accepted in EU law, as long as it does not constitute market distortion. However, in the case of CFR Marfă, the European Commission found exactly that: Romania provided aid in ways that are illegal. Ultimately, that finding would push CFR Marfă to the financial brink.

Skyrocketing debt

​​”Certain public support measures in favour of the state-owned incumbent CFR Marfă have given them an unfair economic advantage vis-à-vis other operators”, the Commission argued in 2020. “They consist of the cancellation of public debts and the failure of public creditors to collect debts from the company. This is in breach of EU State aid rules. Romania will now have to recover the incompatible aid.”

The findings by the Commission made CFR Marfă’s debt skyrocket overnight. The rail freight operator has to pay back the entire sum of over half a billion euros to the government. Whereas its debts amounted to 1.318,06 million Romanian lei (264,89 million euros) in 2019, in 2022 that had grown to 4.464,81 Romanian lei (897,21 million euros). Whereas CFR Marfă has tried to pay back the illegal state aid, it has not been able to do so at a pace desired by the Commission.

Pre-insolvency procedures for CFR Marfă were started in 2020 as the company’s earnings fell dramatically. The Romanian state is now trying to save its rail freight operations. It opted for a Romanian rendition of the ‘Alitalia scenario’ for the future CFR Marfă. In the case of that Italian company, it went bankrupt, closed for three months, and then the state bought the assets and created a new company.

Romania is eyeing a similar scenario for CFR Marfă, according to various RailFreight.com sources. At the same time, the Romanian state seems to be hiding its intentions, since they may turn out to be in breach of EU law and electorally unpopular. Nevertheless, on 16 October, it went ahead and approved the founding of Carpatica Feroviar.

The need for Carpatica Feroviar, according to the state

With CFR Marfă on the edge of ruin, Romania is trying to justify the establishment of the newly born Carpatica Feroviar. The government maintains that it needs to be able to rely on a rail freight operator to carry out various types of transportation. The transport ministry specifically highlights military transport, the provision of humanitarian aid, as well as grain, raw materials and fuel transportation to avoid crises.

“The company will have the legal obligation to ensure the strategic transports of the Romanian state, counterbalancing the risk of refusal of private transport companies to carry out certain railway transports or even their impossibility to take them over, in crisis situations”, the transport ministry explains.

The Romanian transport ministry did not respond to questions asked by RailFreight.com.

The need for Carpatica Feroviar, according to the sector

Rail freight sector experts dispute the government’s stated motivation. According to them, private companies in Romania have the necessary capabilities to provide the transport services, for which the Romanian state wants to use a state-owned rail operator.

Doru Cireasa, editor at the Romanian rail publication Club Feroviar, told RailFreight.com before Carpatica Feroviar’s official approval that the state is indeed trying to save its rail freight business by establishing the company, but that it may have different motivations from what it officially proclaims. According to Cireasa, the government may have an interest in keeping state rail freight alive, because it has a problematic relationship with the private sector.

Difficult relationship with private operators

“From the state’s point of view, it has had a difficult relationship with private operators, in particular with the most important of these, GFR – Romanian Railway Group”, explains Cireasa. CFR Marfă and private operators are in a joint rolling stock venture together, in which private operators are reportedly walking away with profits at the expense of the state-owned CFR Marfă. A recent court case forced CFR Marfă to stay in the arrangement, something the government is sure to be unhappy about.

Cireasa also points out that it was actually the private operators who brought about the downfall of CFR Marfă. It “must be mentioned that at the origin of CFR Marfă’s problems there is a complaint made in March 2017 by the Association of Romanian Private Rail Freight Operators. These filed a formal complaint with the Commission alleging that CFR Marfă had received state aid in breach of EU rules”, Cireasa says. Ultimately, this complaint made the company’s debt skyrocket.

“The government wants to bury this illegality in a much bigger one”

Simona Istrate, the head of the abovementioned association, expresses even bigger concerns about the government’s intentions. “After the European Commission decided what even a blind person would have seen, that the state aid of 500 million euros attributed to CFR Marfă is granted illegally, the government wants to bury this illegality in a much bigger one”, she says.

“The state already has two rail freight carriers, but it looks like it needs one more. Why does it?”, Istrate asks. “In short, the government wants to move all the wagons and locomotives of CFR Marfă to a newly established company, Carpatica Feroviar, and leave all the debts of more than 3 billion lei in an office with CFR Marfă written on the door”, Istrate explains. According to CFR Marfă’s own numbers, the company’s total debt is even higher than that: 4,5 billion Romanian lei (approximately 900 million euros).

The government’s arguments for the necessity of Carpatica Feroviar do not hold up either, according to Simona Istrate. “If CFR Marfă is strategic and Carpatica Feroviar would be even more strategic, why does the state transport its most strategic goods with private operators today?”, she asks. Supposedly, private operators do the job for a lower price than CFR Marfă as well.

“Setting up a new company with the assets of a failed company is just a cheap trick that won’t fool anyone and in the end it is us, the taxpayers, who will pay for all the shenanigans of a government blind, deaf and dumb to the real problems of the rail sector”, she concludes. Publication Club Feroviar calls it a “financial juggling act”.

Illegal business?

Such a move would be a violation of the EU’s competition rules. If Carpatica Feroviar is founded with the assets, staff or contracts of CFR Marfă, then Romania has likely got another case of illegal state aid on their hands. What will happen to the assets of CFR Marfă remains to be seen, even though Istrate expects them to end up with the new state-owned company. The sale process of the company’s assets upon liquidation is still to be determined.

In terms of staffing, according to Doru Cireasa, it is likely that the management of CFR Marfă will find a new home at Carpatica Feroviar: “It is expected that here will be found people from CFR Marfă management, brought through formal selection procedures, even simulated ones.”

For the time being however, it seems that Romania is playing it safe, and is avoiding appointing people from CFR Marfă to the management board of Carpatica Feroviar. Publication Club Feroviar writes that the initial management board consists of “road experts, Iraq veterans and politicians from the transport minister’s office.”

As for the contracts of CFR Marfă, it seems unlikely that private companies can take over the entire 31,2 per cent market share of the company to be liquidated, raising more questions about the role of Carpatica Feroviar in taking over existing state rail services.

The future of Romanian state rail freight

One thing is clear: CFR Marfă will cease to exist. “This is also the requirement of the European Commission. If it fails to pay its debts, then the assets are sold in a bankruptcy process”, Doru Cireasa explains. What eventually ends up happening with Carpatica Feroviar, which got an initial capitalisation of a mere 125,000 Romanian lei (approximately 25,000 euros), remains to be seen.