Strategy for railway infrastructure development

CFR NETWORK STATEMENT - 2026 ANNEX 12.a STRATEGY FOR RAILWAY INFRASTRUCTURE DEVELOPMENT (SYNTHETIC PRESENTATION) Validity: 14.12.2025 – 12.12.2026 Version: 15.0.0 Update: 15.12.2024  Compania Naţională de Căi Ferate “CFR” S.A. România Content 1. Legal context ................................................................................................................................................. 3 2. Current situation ........................................................................................................................................... 4 3. Strategic Objectives ..................................................................................................................................... 7 4. Directions of priority action and expected results .................................................................................... 9 5. Financing Needs ......................................................................................................................................... 12 6. Necessary measures to ensure the feasibility of the Strategy for Railway Infrastructure Development ............................................................................................................................................... 13 7. Next Steps ................................................................................................................................................... 14 CFR Network Statement - 2026 ANNEX 12.a Version: 15.0.0 Updated: 15.12.2024 Page: 2 / 14  Compania Naţională de Căi Ferate “CFR” S.A. România 1. LEGAL CONTEXT The Strategy for Railway Infrastructure Development was elaborated in accordance with the requirements of Law no. 202/20161, which transposes into national legislation the Directive 2012/34 / EU2. Article 8 para. (1) of this law provides the following: „(1) The Romanian State, through the Ministry of Transport, ensures the development of the national railway infrastructure based on a sustainable financing of the railway system, taking into account the needs of the internal transport market and the general needs of the European Union, including the need to cooperate with the neighbouring third countries. To this end, the Ministry of Transport, in consultation with the infrastructure manager, shall develop the indicative infrastructure development strategy in order to meet future mobility needs, in terms of infrastructure maintenance, renewal and development. That strategy shall cover a period of at least five years and shall be renewable. After consulting the interested parties, this strategy shall be approved by a Government decision, published by the Ministry of Transport and transmitted to the European Commission.” In view of the above requirements, the main objective of the Strategy for Railway Infrastructure Development is to substantiate the financing needs of the railway infrastructure in the next five years, based on a medium and long term strategic vision, taking into account the needs of the internal transport market and the general needs of the European Union. From this perspective, it should be mentioned that the strategy covers all relevant areas of railway infrastructure development, namely: the maintenance (maintenance and repairs), the operation, the renewal and the modernization. The comprehensive character of the Strategy for Railway Infrastructure Development offers the guarantee of the efficient use of public funds substantiated as necessary, in order to increase the economic efficiency of the national transport system by rehabilitating the railway transport, with consequences for supporting the growth of the national economy. In accordance with the provisions of paragraphs (2), (3) and (4) of art. 8 of Law no. 202/2016, the Strategy for Railway Infrastructure Development must be a reference document of the company's activity contract3, mainly in the sense that: • the contract establishes the mutual obligations of the parties regarding the implementation of the Strategy for Railway Infrastructure Development; • the contract provides for the multi-annual financing plan for the railway infrastructure, determined on the basis of the financing needs substantiated within the strategy. The Strategy for Railway Infrastructure Development is correlated with the General Transport Master Plan of Romania (GTMP)4, in the sense that it includes the priority projects regarding the modernization of the infrastructure related to the TEN-T network and the European railway corridors, which are the object of the partnership with the European Commission. Moreover, the financial needs for the period 2021-2025, identified in the Strategy for Railway Infrastructure Development, are correlated with the financial projections of the GTMP related to this period. 1 Law no. 202/2016 on the integration of the Romanian railway system in the single European railway space, published in the Official Gazette no. 900 of November 9, 2016, as subsequently amended and supplemented 2 Directive 2012/34 / EU of the European Parliament and of the Council of November 21, 2012 on the establishment of the single European railway area, published in the Official Journal of the European Union series L, no. 343 of December 14, 2012 3 Contract that is concluded between the Ministry of Transport and the infrastructure manager, for a period of at least 5 years, according to the provisions of art. 30 of Law no. 202/2016 4 Approved by GD no. 666/2016 CFR Network Statement - 2026 ANNEX 12.a Version: 15.0.0 Updated: 15.12.2024 Page: 3 / 14  Compania Naţională de Căi Ferate “CFR” S.A. România 2. CURRENT SITUATION The strategy is based on a comprehensive analysis of the current situation of the railway transport, as an effect of the evolution in the last 30 years. The analyzes highlight the very limited competitiveness of the rail transport in relation to the other modes of transport, but especially in relation to the road transport. This leads to a deeply unbalanced structure of the national transport system, which is reflected in the market shares of the transport modes (the modal shares). Thus, the modal share of rail transport on the land transport market is: • 4.2% in the field of passenger transport on interurban relations (this modal share takes into account also the individual transport by motorized means), respectively of 21.1% in the field of public passenger transport on interurban relations; • 21.9% in the field of commercial freight transport on interurban relations. This modal imbalance of the national transport system is reflected primarily in the excessive overload of the road network, whose transport capacity has already reached the critical levels on most important transport relations (with consequences for increasing the frequency of roadblocks, limiting the travel speeds and the exponential increase in the number of accidents with serious consequences). The analysis of the evolution over time of the railway passenger and freight transport reveals a major decline in the last 30 years, both in terms of transport volume (measured in the number of passengers transported, respectively in the tons transported) and in terms of the volume of services (measured in passenger-km and tonne-km, respectively). For both indicators there were very high contractions, of over 80%, both in passenger traffic and in freight traffic. Variation in relation to 1989 [%] 100,0 90,0 volume of performance volume of transport 80,0 70,0 60,0 a) Passengers Traffic 50,0 37,9% 40,0 30,0 30,5% 16,7% 20,0 10,0 14,5% 0,0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Variation in relation to 1988 [%] 100,0 90,0 volume of performance volume of transport 80,0 70,0 60,0 b) Freight Traffic 50,0 35,0% 40,0 30,0