Romania’s Govt To Reorganize State-Owned Cos, Self-Governing Institutions

Romania’s Government will reorganize, merge or disband state-owned companies and self-governing state bodies, as it did with government agencies, to cut their losses estimated at RON4.8 billion (1EUR=RON4.2552) at the end of 2008.

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The reorganization procedures of state-owned companies and self-governing state bodies will begin after the law on reorganizing government agencies is adopted in the Parliament, official sources told MEDIAFAX Friday.

According to a government document, the number of state-owned companies and self-governing state bodies that registered losses at the end of 2008 reached 180, with a total turnover of RON18 billion.

The biggest net losses were registered by the National Railroad Company CFR (RON782.2 million), heat and hot water distributor RADET Bucharest (RON659.6 million), company for precious and non-ferrous metals Remin Baia Mare (RON372 million), the National Coal Company (RON351.1 million), energy company Electrocentrale Bucharest (RON345.5 million), energy producer Termoelectrica (RON344.7 million), the passenger division of the railroad company CFR Calatori (RON260 million), energy sector maintenance and services company Electrica Serv (RON180.6 million) and the freight division of the railroad company CFR Marfa (RON169.4 million).

The document lists other state companies and self-governing state bodies whose losses vary from RON117.3 million to RON6.3 million.

According to the stand-by agreement signed by Romania with the International Monetary Fund, state-owned companies and companies where the state is the majority shareholder must be monitored so as to improve their activity and cut losses.

The monitoring system will be implemented following previous years' experience with the Fund, when state-owned companies underwent recurrent verifications of their expenses.

In August, the Government decided to reorganize and merge government agencies, so that the country's 223 agencies were reduced to half and 7,800 jobs were scrapped.

The law on government agencies reorganization is included in the packs of laws for which the Executive will assume responsibility in Parliament next week.

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