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The long road to effectiveness - Doing Business | DOINGBUSINESS.RO

  |  14.11.2012

The long road to effectiveness

Transport and cargo industry in Romania carries some of the most important privatization assignments to the local economy and seemingly, the year comes to an end close to a bitter conclusion, that of a hard and very slow process

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The only company in this industry that seems to have seen an advance is Romanian Post National Company (Posta Romana), where the consultancy group has been selected. On the other hand, the state-owned postal company started already to compete side by side with private carriers, many of them part of multinational groups. This segment saw recently a large joint-venture of two large international operators and the companies  feel the rush of market share on a very competitive market. 


Privatizations, harder than never


The largest operator on the couriers market, Romanian Post National Company, is heading towards a long-waited privatization after a consortium established by KPMG Romania and law firm Tuca Zbarcea si Asociatii has been selected in September this year to offer consultancy services in the privatization process conducted by the Ministry of Communications and Information Society (MCTI). According to the ministry, the first stage of privatization has been completed so far and a strategic investor has to be selected. The new investor at the national postal services company will own more than 20 percent share package and the operation will be done through a capital increase procedure. The state company runs over 7,000 postal offices, over 32,000 employees and its main shareholders are the Romanian state with 75 percent of shares and Proprietatea Fund, with 25 percent.


CEO for state, wretched result


As the privatization of “Posta Romana” is part of the agreement with the International Monetary Fund and European Union, another major privatization on the IMF list and expected to happen is the national air company Tarom. October came with a surprise, that of the selection of a new board for Tarom, including names as Dumitru Prunariu, Dan Pascariu, Lucian Isar, Marius Ghenea, Ciprian Ladunca, Valentin Macec. Though, the helm of the company was empty at the end of October as the would-be CEO of Romanian flag air carrier Tarom, Heinrich Vystoupil, has reportedly refused to take the post at the end of October. The naming marked an unsuccessful debut of the national program “CEO for state” agreed with IMF at one year since it started.


Another state-owned company on the privatizations list is The National Rail Freight Company “C.F.R. Marfa” S.A. The privatization procedure is pending until the year-end, as the privatization strategy has got a red line from the Supreme Council of National Defense (CSAT). The strategy has been firstly approved by the Ministry of Finances, Ministry of Administration and Interior, Justice and Competition Council.


Private vs. state: Competing side by side


For 2012, carriers estimate a rather modest growth of this industry, of some 3-4 percent. According to Fan Courier, the local market’s value remains at an amount around EUR 200 million.

The ANCOM statistics noticed spectacular leap in the cross-border traffic in 2011, with reference to the items sent from abroad to Romania, which grew by over 300 percent as against 2010 - to 3,196,000 items. At the same time, the postal items sent from Romania to other countries went down by 16 percent (from 235,716 processed in 2010 to 198,584 processed in 2011).


The services outside the scope of universal service also registered increases in terms of total traffic. In this segment, 103,250,000 items were collected and distributed, accounting for 20 percent of the overall mail traffic in 2011. Domestic items grew by 21 percent compared to 2010, while the cross-border traffic fell by 6 percent.


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