According to a recent exclusive article in Reuters, three European railway companies – Russian, Romanian and French – are interested in buying all or part of Greece’s railway business, as the country sells assets to satisfy lenders.
“Russia is considering buying the entire Greek railway network and its operator Trainose, while Romania’s largest private railway company, Grup Feroviar Roman (GFR), has expressed interest in the cargo business,” two high-level Greek officials said to Reuters.
“We’re keeping in contact with the Greeks…They haven’t decided on the model yet, so it’s too early to talk about our participation,” explained Russian Railways official Vladimir Yakunin to the British newspaper.
According to Greek sources, “French railway company SNCF wants passenger and freight routes and has gone through a due diligence process,” adding that business meetings have taken place in Athens and Paris for the past two years.
One of the Greek officials told Reuters he had met several times with a delegation from GFR, which owns freight operations in Romania, Hungary, Bulgaria and Serbia, among other countries. They most recently met in February.
“The success of a deal with the European railway companies hinges largely on the Greek state’s ability to receive European Union approval for the state intervention. Athens is pushing for the green light prior to going ahead with the privatization,” says the article, adding, “Trainose, which used to be the half company of OSE, is among dozens of state-owned businesses put on the auction block under Greece’s 130 billion euro bailout program with troika of the European Commission, European Central Bank and International Monetary Fund.”
One of the two Greek officials said a Russian delegation of around 20 people visited Athens late in 2011 and reviewed Trainose’s books to assess its value and profitability. It was, however, unclear if OSE was part of the negotiations.
The article also referred to the Chinese “giant,” explaining that, “China has already seized opportunities presented by Greece’s debt crisis, with China-based COSCO Pacific last year taking control of Greece’s largest container terminal, Piraeus, negotiating a 35-year lease for almost $5 billion.”
“Two Greek government officials in Brussels said they have been pressured by European Commission officials to sell off the railways sooner than a previously agreed timetable, which they argue will hurt the price. The key hurdle to a sale is securing approval from the European Competition Commission (ECC) for the aid to Trainose and OSE, which is required under EU competition laws,” mentioned Reuters in regards to the EU intervention, adding that “if the Commission finds the aid violated EU rules and constituted an illegal government subsidy, the debt would then become the responsibility of a prospective new owner.”