The ailing state BDZ had hoped to raise about 200 million levs ($124.88 million) from the sale to pay back debt due by the end of the year and secure a new loan from the World Bank. Its total debt is around 740 million levs.
But despite initial interest from Romanian, Czech and Russian investors, only one company owned by an offshore entity has filed documents for obligatory checks from the country's security services before it can place a bid.
"The privatization agency cancelled the tender for the sale of the cargo unit. The motives include the lack of serious investor interest in the beginning of the process, which prevents a competitive tender," the agency said in a statement.
The agency said it will review again its analysis on the cargo unit, which has over 4,500 aging rail-cars and employs over 4,000 people, and will try to sell the unit again.
Industry officials have criticized the government for setting too high criteria on revenues for potential investors. (Reuters)
