Romania: Ministry of Finances signed accord with DEXIA to finance railways

Sebastian Vladescu, the minister of public finance, concluded financing accord for EUR 100m between the Romanian state and Dexia Komunalkredit Bank in Vienna to partially finance the modernization of Bucharest - Constanta railway.

The project benefits from a loan of EUR 142.5m, granted by the Japanese Bank for International Cooperation (JBIC). Dexia credit will be paid in 15 equal installments over 10 years with a grace period of three years and a variable interest rate.

All loan costs will be paid from the annual budget of the Transport Ministry, the beneficiary of the loan.

The government approved to sign the financing at the end of 2006, Dexia’s offer being considered the most advantageous by the Ministry of Public Finance.

Funds will be used to repair sections Bucharest North-Baneasa – 4 lm long, and Fetesti-Constanta 77 km, to allow average speed of 160 km per hour for passenger trains and 120 km per hour for goods trains.

Repair works for the section Bucharest-Constanta have been completed on a proportion of 20% and will be over by the end of 2008.

The modernization of the other sections, initiated in April 2006 is financed by EU, through ISPA funds and by the government.

The project has in view to reconstruct the lines and bridges, civil works in stations , for communication systems, for the contact line and electricity supply installation.

The works are carried out by the companies Takenaka and Taisei (Japan), Leonhard Weiss, Heitkamp, Wiebe, Balfour Beatty Rail, Alcatel (Germany) and Swietelsky Austria.

Representatives of the Romanian branch of the Austrian bank showed that after the conclusion of this loan accord Dexia covered 85% of all foreign credits concluded by the Ministry of Public Finance from commercial banks.

Dexia Komunalkredit Bank, a part of Dexia group, based in Vienna, was set up in 2005, being specialized in financing projects in the public sector in Central and Eastern Europe.

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