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Railways Renewal in Romania
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One critical element of development initiatives is reform that promotes railways’ evolution from a government-run enterprise to one that is more responsive to market conditions. In Romania, the issue’s impact extended beyond passenger and freight transport system modernization. Successful execution of railway reform was one requirement for achieving EU membership, which is an economic priority for the country. |  | | Prior to the start of this project, the railway functioned almost as a state within the state. With its own schools, hospitals, hotels, restaurants, and cleaning companies, it suffered from systemic inefficiency and redundancy. An essential first step in the reform process therefore was to identify core versus non-core units and determine which of the non-core units could be privatized. This allowed for the preservation of jobs that, once shifted to the private sector, no longer were a burden on the railway payroll. |  | | Core businesses—passenger and freight services as well as infrastructure—were reconfigured with the goal of making each capable of recovering its costs of operation, and the freight company realizing a profit. Many passenger services are social services, which the government funds through a public service contract enabling also the passenger services operate on a commercial basis. In this way the passenger services can be improved where there is a solid market demand. |  | The freight company must compete on an equal footing with the private sector, which includes about over twenty operators who, though smaller than the former state-run operation, provide niche services. Infrastructure generates revenue and profits by charging both the passenger and freight companies for use of the track. The project’s achievements extend beyond its substantial improvements in track renewal/maintenance and passenger services. One area of particular focus was enhancing the |  | capacity and reliability of the internal railway communications and data transfer infrastructure. Network installations completed through the project include 3530 km of optical fiber, 60 Siemens High Capacity Switches, 224 switches that form the foundation of the ISDN Network, and LANs. As a result of these installations, the project’s communications and data tranfer objectives were fully realized. Underlying all these successes is the passage of legislation that created a legal environment in which railway reform could be enacted. Without new laws, this project would not be the resounding success that it has become. Today, Romania’s railway service is a streamlined and more narrowly focused enterprise that is better equipped to maximize both its financial performance and its utility to the end users—both individuals and businesses—who rely on its services. The railways are EU compatible; in fact, railway restructuring efforts in Romania have outstripped those in many EU member countries. This will create additional and far-reaching advantages for the country as it redefines its role on the world stage. | 
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