COMMISSION IMPLEMENTING DECISION on the partial suspension of the disbursement of the third instalment of the non-repayable support and the third instalment of the loan support for Romania 

EUROPEAN COMMISSION Brussels, 28.5.2025 C(2025) 3490 final COMMISSION IMPLEMENTING DECISION of 28.5.2025 on the partial suspension of the disbursement of the third instalment of the non- repayable support and the third instalment of the loan support for Romania Only the Romanian text is authentic EN EN  COMMISSION IMPLEMENTING DECISION of 28.5.2025 on the partial suspension of the disbursement of the third instalment of the non- repayable support and the third instalment of the loan support for Romania Only the Romanian text is authentic THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility1, and in particular Article 24(6) thereof, Whereas: (1) According to Article 4(2) of Regulation (EU) 2021/241, the specific objective of the Recovery and Resilience Facility is to provide Member States with financial support with a view to achieving the milestones and targets of reforms and investments as set out in their recovery and resilience plans. (2) Council Implementing Decision of 3 November 2021 on the approval of the assessment of the recovery and resilience plan for Romania2 (the ‘Council Implementing Decision’) provides that the Union is to release instalments in accordance with the Financing Agreement and the Loan Agreement conditional on a decision by the Commission, taken in accordance with Article 24(5) of Regulation (EU) 2021/241, that Romania has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the recovery and resilience plan. (3) On 15 December 2023, Romania submitted a request for payment of the third instalment of the non-repayable support and the third instalment of the loan support, accompanied by a management declaration and a summary of audits. Pursuant to Article 24(3) of Regulation (EU) 2021/241, the Commission assessed on a preliminary basis whether the relevant milestones and targets set out in the Council Implementing Decision had been satisfactorily fulfilled. For the purpose of that assessment, the operational arrangements concluded between the Commission and Romania3 in accordance with Article 20(6) of Regulation (EU) 2021/241, were taken into account. (4) Section 2.1.3 of the Annex to the Council Implementing Decision provides the relevant milestones and targets that are to be satisfactorily fulfilled for the third instalment of the non-repayable support for an amount of EUR 1 858 678 580. 1 OJ L 57, 18.2.2021, p. 17. 2 ST 12319/21; ST 12319/21 ADD 1 as amended by ST15833/23; ST 15833/23 ADD 1. 3 Recovery and Resilience Facility Operational arrangements between the European Commission and Romania, entered into force on 25 May 2022. The amendment to the Operational arrangements entered into force on 15 March 2024. EN 1 EN  (5) Section 2.2.3 of the Annex to the Council Implementing Decision provides the relevant milestones and targets that are to be satisfactorily fulfilled for the third instalment of the loan support for an amount of EUR 811 026 482. (6) As a result of the assessment provided for in Article 24(3) of Regulation (EU) 2021/241, the Commission established that milestone 72 on “Signature of contracts for 50% of the works related to modernisation, upgrade and renewal of railway infrastructure”, milestone 79 on “Selection and appointment of members of the Board of Directors of C.N.A.I.R., C.N.I.R, C.F.R., Metrorex, C.F.R. Călători”, milestone 86 on “Signature of contracts for 50% of the works, following open and competitive tenders and relevant permits obtained”, milestone 121 on “Improving corporate governance of State-owned companies in the energy sector”, milestone 206 on “Entry into force of amendments to the Fiscal Code gradually reducing the scope of the special tax regime for micro enterprises” and milestone 440 on “Operationalisation of the task force at the Centre of the Government for Corporate Governance Policy Coordination and Monitoring” have not been satisfactorily fulfilled. In accordance with Article 24(6) of Regulation (EU) 2021/241, the Commission communicated to Romania its assessment on 16 October 2024 and informed Romania that it could present its observations on the Commission’s assessment within one month from the date of that communication. (7) On 15 November 2024, Romania presented its observations on the Commission’s assessment pursuant to Article 24(6), first subparagraph of Regulation (EU) 2021/241. (8) On 31 December 2024, it has come to the Commission’s attention that Romania has taken additional measures to ensure the satisfactory fulfilment of a milestone which was considered not satisfactorily fulfilled as a result of the assessment provided for in Article 24(3) of Regulation (EU) 2021/241. This concerns milestone 206 (“Entry into force of amendments to the Fiscal Code gradually reducing the scope of the special tax regime for microenterprises”). Romania provided the Commission with a summary document and evidence supporting the satisfactory fulfilment of milestone 206. On this basis, the Commission has adopted a positive preliminary assessment of milestone 206. (9) In addition, as a result of the assessment provided for in Article 24(3) of Regulation (EU) 2021/241, the Commission established that milestone 215 on “Entry into force of the legislative framework for reducing expenditure on special pensions” which was assessed as satisfactorily fulfilled in its positive preliminary assessment of 15 October 2024 is no longer satisfactorily fulfilled. In accordance with Article 24(6) of Regulation (EU) 2021/241, the Commission communicated to Romania its assessment on 25 March 2025 and informed Romania that it could present its observations on the Commission’s assessment within one month from the date of that communication. (10) On 9 April 2025, Romania presented its observations on the Commission’s assessment pursuant to Article 24(6), first subparagraph of Regulation (EU) 2021/241. (11) On the basis of the justification provided in the request for payment and the observations presented by Romania, the Commission still considers that milestone 72 on “Signature of contracts for 50% of the works related to modernisation, upgrade and renewal of railway infrastructure”, milestone 79 on “Selection and appointment of members of the Board of Directors of C.N.A.I.R., C.N.I.R, C.F.R., Metrorex, C.F.R. Călători”, milestone 86 on “Signature of contracts for 50% of the works, following open and competitive tenders and relevant permits obtained”, milestone 121 on “Improving corporate governance of State-owned companies in the energy sector”, milestone 215 on “Entry into force of the legislative framework for reducing expenditure on special pensions”, and milestone 440 on “Operationalisation of the task force at the Centre of EN 2 EN  the Government for Corporate Governance Policy Coordination and Monitoring” have not been satisfactorily fulfilled. (12) Regarding milestone 72, measure C4.I1 is entitled “Modernisation and renewal of railways infrastructure” and its description requires that “The objective of this investment is to “modernise” the railways lines (including rail replacement, sleeper, substrate, electrification, consolidation/construction of bridges/bridges, ERTMS level 2) in line with TEN-T standards, and to “renew” (replacement of rail, traverse, broken stone, thus bringing the line to constructive speed) and electrify specific railways sections. In addition, eleven “quick wins” investments are foreseen to remove railways speed restrictions, increase train speed and increase railway safety. “Quick wins” projects shall be implemented to ensure the viability of rail transport along the TEN-T corridors until their upgrading. In total, the investment shall deliver 315km of upgraded railway lines with a capacity increase of 30% and ERTMS 2 installed; 2 426km (2 163km single track “quick wins” projects + 263km renewal of lines) of renewed railways with 15% increased speed (reaching an average speed of minimum 100km/h). The investment also includes a portfolio of 17 electronic centralisation projects to be implemented through the national recovery and resilience plan, which have a balanced spatial distribution in Romania and represent genuine railway sections supplying the TEN-T corridors. The 17 electronic centralisation projects shall solve capacity problems for 111 railway stations over a total length of more than 973km. As a consequence, it is estimated on increase of traffic volumes by 10-15%. In addition, the proposed electronic centralisation projects shall remove road bottlenecks from level crossings by significantly reducing waiting times. It is expected that this measure does not do significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measure and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01). In particular, the projects shall fully respect the results and conditions set by the Environmental Impact Assessment to be completed in accordance with Directive 2011/92/EU, as well as relevant assessments in the context of Directive 2000/60/EC and Council Directive 92/43/EEC, including the implementation of required mitigation measures. This shall ensure that the investment does not significantly or irreversibly impact affected water bodies and does not cause significant negative impacts on protected habitats and species. The implementation of the investments shall be completed by 30 June 2026, with 50% of the works completed by 31 December 2024.” (13) Milestone 72 of the Council Implementing Decision, which pertains to measure C4. I1 requires that “The target refers to the award of contracts with winning companies equivalent to 50% of the works for the construction and supervision of railways as follows: - Modernisation, electrification of railway tracks, ERTMS on the section Arad- Timișoara - Caransebeş; - Upgrade, electrification of railway tracks, ERTMS on the section Cluj-Napoca - Episcopia Bihor. The renewal investments cover the following lines: • Bucharest — Pitești — TEN-T Comprehensive; • Reșița — Voiteni — Link to TEN-T Core Corridor. The investment shall also include a series of “Quick Wins” projects to remove speed restrictions and limitations on the following sections: • Bucharest — Craiova; • Arad — Oradea; • Sibiu — Copșa Mică; • Oradea — Satu Mare — Halmeu; • Apahida — Dej — Baia Mare — Satu Mare; • Dej — Beclean — Ilva Mica; • Adjud — Siculeni; • Filiași — Tg.Jiu — Petroșani — Simeria; • Pitești — Slatina — Craiova; • Coșlariu — Teiuș — Cluj-Napoca; • Tecuci — Bârlad — Vaslui — Iași. The tender process shall be carried out in accordance with L98/2016 and its subsequent amendments, which transposed the relevant European Directive EN 3 EN  2014/24/EU. The awards of contracts shall follow open and competitive tenders and the approval of relevant permits, with Environmental Impact Assessment (including assessments necessary under the Water Framework Directive) and Appropriate Assessment opinions (part of the Habitats Directive) issued and incorporated in the design of the investments, and ensure compliance with the Do Not Significant Harm Technical Guidance (2021/C58/01).” The fulfilment of the milestone is subject to the “signature of contracts”. (14) Romania has not provided to the Commission due justification that this milestone has been satisfactorily fulfilled. (15) On 25 January 2024, Romania provided to the Commission the contracts concluded by the contracting authority (National Railway Company - Compania Națională de Căi Ferate “C.F.R” SA) for seven lots covering two of the railway sections listed in the investment and milestone’s description, namely: (i) Modernisation, electrification of railway tracks, ERTMS on the section Arad-Timișoara - Caransebeş4; and (ii) Upgrade, electrification of railway tracks, ERTMS on the section Cluj-Napoca - Episcopia Bihor5. The authorities explained that the contracts provided were sufficient to demonstrate the fulfilment of the requirements of milestone 72, while the contracts for the remaining investments as detailed in the milestone’s description6 would be reported for the assessment of milestone 73 which in turn requires the signature of contracts for 100% of the works. (16) Milestone 72 requires the signature of 50% of contracts for works for different types of investments. The contracts provided by the national authorities to prove fulfilment of this requirement refer to works consisting in modernisation, upgrading and electrification of the respective railway sections (including rail replacement, sleeper, substrate, electrification, consolidation/construction of bridges, ERTMS level 2) in line 4 The procurement procedure for the investment concerning Modernisation, electrification of railway tracks, ERTMS on the section Arad-Timișoara - Caransebeş was split into four lots, for which the authorities provided the following three contracts: (i) Contract No. 133/28.11.2022 in the amount of RON 1 916 221 849.14 (approx. EUR 389 262 365.98 equivalent), VAT excluded, for Lot 2 – Lugoj – Timișoara Est, with a length of 54.13 km. (ii) Contract No. 124/04.11.2022 in the amount of RON 1 440 433 361.02 (approx. EUR 292 610 429.44), VAT excluded, for Lot 3 – Timișoara Est – Ronaț Triaj Gr. D, with a length of 13.86 km. (iii) Contract No. 131/17.11.2022 in the amount of RON 2 184 174 656.60 (approx. EUR 443 494 447.36 equivalent), VAT excluded, for Lot 4 - Ronaț Triaj Gr. D – Arad, with a length of 48.16 km. For lot 1, the authorities explained that the corresponding contract would be reported under the subsequent milestone 73. 5 The procurement procedure for the investment concerning Upgrade, electrification of railway tracks, ERTMS on the section Cluj-Napoca - Episcopia Bihor was split into four lots, for which the authorities provided: (i) Contract No. 189/30.12.2022 in the amount of RON 1 611 475 802.43 (approx. EUR 327 356 085.48 equivalent), VAT excluded, for Lot 1 – Cluj-Napoca – Aghireș with a length of 30.41 km. (ii) Contract No. 185/21.12.2022 in the amount of RON 1 535 202 975.30 (approx. EUR 311 861 981.23 equivalent), VAT excluded, for Lot 2 – Aghires – Poieni, with a length of 36.53 km. (iii) Contract No. 128/10.11.2022 in the amount of RON 2 117 167 899.08 (approx. EUR 430 082 657.70 equivalent), VAT excluded, for Lot 3 – Poieni – Aleșd, with a length of 52.74 km. (iv) Contract No. 173/07.12.2022 in the amount of RON 2 416 850 365.99 (approx. EUR 490 960 319.54 equivalent), VAT excluded, for Lot 4 – Aleșd – Hungarian border, with a length of 46,744 km of which 39,65 are supported from RRF. 6 The renewal investments cover the following lines: • Bucharest — Pitești — TEN-T Comprehensive; • Reșița — Voiteni — Link to TENT Core Corridor. The investment shall a