IMF TO THE MINISTRY OF TRANSPORTS "Your companies spend more than they earn"

• CFR "Călători" needs to lay off staff CFR "Marfă" is preparing for privatization

• METROREX must cut spending by 20%

The conclusion of yesterday"s meeting between the officials of the IMF and the Minister of Transports, Radu Berceanu, was that the Ministry needs to trim the expenses of companies it runs. Right now expenses of the divisions of the Romanian railway exceed their revenues.

"The IMF and me are both unhappy with the operation of the four companies controlled by the Ministry, as they spend more than they make", Berceanu said.

Radu Berceanu and the IMF have agreed that CFR "Călători" (passenger services) needs to be restructured, in particular by laying off employees, as its staff is oversized and causes large overhead.

According to the Ministry, even though 14,300 employees in the system were supposed to be laid off, only 4,600 were laid off so far.

In the coming period, 400 employees of the Ministry will be let go.

The Minister of Transports has proposed that CFR "Marfă" (freight transport) be prepared for privatization, which would make the company more "attractive".

"We want to use the funds earned from privatization to invest in railroad tracks", the Minister of Transports said.

The minister said that he intends to make an international call for tenders from investors in the sector.

Concerning METROREX, the officials of the IMF were extremely upset that the ministry accepted a 20% wage increase during the crisis.

Radu Berceanu explained: "The envoys of the IMF told me, . But I didn"t authorize those wage hikes, I even cut bonuses in that company. I can"t tell the people that work there that they have to give back the money they"ve received over the course of the seven months of 2009. If I were to cut their wages in half, they"d go on strike".

The Minister of Transports has asked the IMF to allow ongoing infrastructure projects to continue, to allow for a multiplication effect in the economy.

"We have asked the IMF to allow us spend all the money we have available from loans from the EIB (European Investment Bank), even if it means the budget deficit would increase from 7 to 7.3%, for example", the Minister of Transports said. He added that the officials of the IMF have agreed to the allocation of an additional 500 million Euros this year for infrastructure investments, subject to this amount being obtained from cutting back on wages and procurement of services and materials.