Romanian Govt. Drafts Plan to Help Bucharest Subway Operator Avoid Insolvency

Increasing the price of metro tickets in June, suspending the 18% wage hike for four months, and cutting the weekend and holiday bonuses are among the main actions pondered by the Transport Ministry to improve the balance of Bucharest subway operator Metrorex by RON 100 million (EUR 20 mln), Romania-Insider.com reported. This way, the company could avoid cash flow problems in 2021, although remaining in the loss area. According to a draft consulted by Economedia.ro, Metrorex estimates losses of RON 230 mln (EUR 46 mln) in 2021, RON 63 mln (EUR 12 mln) more than last year's RON 167 mln losses. This would result in a cash deficit of RON 100 mln - which is what the Government wants to avoid. The draft was reportedly presented at the Metrorex Board of Directors' meeting on March 30, when the Board concluded that there is "a major risk of insolvency due to the impossibility of covering the company's expenses." In this context, transport minister Catalin Drula said that "the salaries and the staff can not remain the same." "There are only two simple mathematical options: either a renegotiation of salaries is accepted, or people are made redundant. There is a third option: insolvency. An insolvent company can also make pay cuts and layoffs," the minister said. Read more.
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