Metrorex expansion needs at least EUR 3 billion to get back on track

Newsroom 08/10/2007 | 15:33

With the ever more hectic Bucharest traffic, the subway is increasingly popular as a means of transportation. Metrorex currently carries a total of 140 million passengers per year or approximately 650,000 per day. The need for network expansion is obvious, but even though works have been underway for a few years, there is not yet an established deadline for these subway lines to be functional.

Rolling projects
According to Metrorex officials, current investments target the expansion of the network between Nicolae Grigorescu and the belt line of Bucharest (four stations and 4.75 kilometers), and the 1Mai and Laromet network expansion (six stations and 6.1 kilometers).
“The works started in 1990 but because of the lack of funding and the slow rhythm at which the project was done in 1994 the operations were stopped. In the meantime, what was done got worse because of the water damage. In 1996, the Transportation Ministry began a study on the consolidation of the subway. Just after that, the search for sources to continue the projects began,” said Mariana Petre, communication manager at Metrorex.
According to Metrorex officials, Nicolae Grigorescu Street and the belt line of the Bucharest extension of the network received financing in 2000 from the European Investment Bank (BEI). After seven years, the work is still not finished.
“The electrical installations for tractions, montage of the installations for traffic safety, radio transmission and elevators are all still to be done. The total value of the investment reached EUR 76 million,” said Petre. It is estimated that the line will be functional in the second quarter of next year.
The history of the 1 Mai-Zarea subway section is even more troubled. Metrorex received the approval for the financing of the project from BEI in 1997.
“It is estimated that in two years from when the EUR 55 million necessary for the investment is obtained, the project should be finished – meaning the end of 2010. But at the moment, Metrorex has not come up with as much as a nickel of the necessary money,” said the Metrorex communication manager.
Meantime, the firm has gone shopping for new trains.
The Romanian company will receive from the Swedish Bombardier nine new trains by the end of the first quarter of 2008 as part of an overall shipment worth EUR 165 million.
According to the Metrorex general manager, the funds are being provided through a loan from BEI, plus some money from the state budget.

Eyes trained on the future
Metrorex has also announced projects including another four new lines and one subway extension. The line from Drumul Taberei to Pantelimon should be finished in two stages.
It involves a total of 17 km and will require an investment of EUR 1.4 billion. “The new line will be equipped with modern energy connections, sanitary and ventilation systems, and vertical transportation to facilitate access to the subway. The project is estimated to be finished in the next seven years,” said Petre.
The projects are not viable however, without the money obtained from loans. Metrorex says it will also build a line to connect the city with Henri Coanda Airport (15.8 kilometers and an investment of EUR 1 billion), one for Gara de Nord – Izvor – Soseaua Giurgiului – Gara Progresul (10.67 kilometers and EUR 550 million investment), Soseaua Alexandriei – Calea Mosilor – Colentina – Voluntari (20.45 kilometers and EUR 924 million financing) and a line between Crangasi – Rahova –
Toporasi – Dristor (16.4 kilometers and an investment of EUR 741 million).
At one point this year there was talk of the listing of Metrorex on the Bucharest Stock Exchange but soon after the idea was dropped. “There were discussions to list Metrorex on the BSE as an obligation stipulated for the Property Fund but in September this year Metrorex was eliminated from the fund's portfolio through a government decision and it will no longer be listed on the stock exchange,” said Narcisa Oprea, associate lawyer at Bostina and Associates, the law firm that was to have handled the listing for Metrorex.
In another recent development, Metrorex has had to deal with its own debts to Alstom, its maintenance company.
The Transportation Ministry had to take out a EUR 17 million loan to pay the debt Metrorex had to Alstom, thus preventing the maintenance contract from being terminated.
A tough reality for Metrorex, especially as the Romanian underground transportation company has to turn out its pockets and come up with EUR 3 billion in funds.

Dana Ciuraru

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