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June 11, 1999
Mr. Viorel Simut 
General Manager and Chairman of the 
  Board of Management National Railway Company S.A. 
38, Dinicu Golescu Blvd. 
77113 Bucharest 1 Romania
Re:
Loan No. 3976 RO (Railway Rehabilitation Project)
Amendment to Loan Agreement
Dear Mr. Chairman:
We refer to the Loan Agreement for the above-mentioned Project and to our 
discussions concerning a proposed amendment to the same on the basis, inter alia, of 
the following considerations:
A.
By a loan agreement between the Bank and Societatea Nationala a Cailor Ferate 
Romania (SNCFR), dated January 19, 1996 (the Loan Agreement), the Bank made a loan 
(the Loan) to SNCFR in an amount in various currencies equivalent to one hundred 
twenty million U.S. dollars ($120,000,000) on the terms and conditions set forth in 
the Loan Agreement.
B.
By a guarantee agreement between Romania and the Bank, dated January 19, 1996 
(the Guarantee Agreement), Romania guaranteed all the obligations of SNCFR contained 
or referred to in the Loan Agreement on the terms and conditions set forth in the 
Guarantee Agreement.
C.
By Emergency Ordinance No. 12, adopted by the Government of Romania on July 7, 
1998,  SNCFR was reorganized, and by subsequent governmental decisions five new 
companies were established to take over partially the patrimony of SNCFR, namely the 
National Railway Company S.A. (CFR), the National Freight Transport Company S.A. (CFR 
Freight), the National Passengers Transport Company S.A. (CFR Passengers), the Rail 
Assets Management Company S.A. (SAAF) and the Rail Management Services Company S.A. 
(SMF).
D.
Romania and SNCFR have requested, and the Bank has agreed, that: (i) CFR 
undertake all the covenants, agreements and obligations of SNCFR (as Borrower) under 
the Loan Agreement, in lieu of SNCFR; and (ii) each of the other four new companies, 
namely CFR Freight, CFR Passengers, SAAF and SMF, enter into a separate project 
agreement with the Bank.
In consideration, inter alia, of the foregoing, we hereby agree that the 
Borrower be CFR (in lieu of SNCFR) and that the Loan Agreement be amended  as follows:
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Section 1.02 is amended to read:
""CFR Performance Contract" means a multi-annual performance contract entered 
into between  the Guarantor and the Borrower governing the respective responsibilities 
of the Guarantor 
and the Borrower in operating the railway system;
"CFR Passengers Performance Contract" means a multi-annual performance contract 
entered into  between the Guarantor and CFR Passenger governing the respective 
responsibilities of the 
Guarantor and CFR Passengers in operating the railway 
system;
“PMT” means the Project management team to be maintained by the Borrower, in 
accordance with 
the provisions of Section 3.03 of this Agreement;
"Restructuring Action Plan" or "RAP" means the plan, agreed with the Bank, which 
sets 
objectives and implementation actions for the restructuring process of 
the Romanian railway 
system, including operation and financial targets to be 
reached; 
“Special Account” means the account referred to in Section 2.02 (b) of this 
Agreement;
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"SNCFR Emergency Ordinance" means the emergency ordinance regarding  the 
transportation on 
the Romanian railways and the reorganization of the Romanian 
railway company (SNCFR), No. 
12, adopted by the Government of Romania on July 7, 
1998;
“Project Entity” means any of CFR Freight, CFR Passengers, SAAF or SMF;
“Project Agreement” means any of the project agreements entered into between the 
Bank and 
each Project Entity;
“CFR Decision” means decision No. 581 on the establishment of the National 
Railway Company 
S.A., issued by the Government of Romania on September 10, 1998;
“CFR Freight Decision” means decision No. 582 on the establishment of the 
National Freight 
Transport Company S.A., issued by the Government of Romania on 
September 10, 1998;
“SMF Decision” means decision No. 583 on the establishment of the Rail 
Management Services 
Company S.A., issued by the Government of Romania on 
September 10, 1998;
“CFR Passengers Decision” means decision No. 584 on the establishment of the 
National 
Passengers Transport Company S.A., issued by the Government of 
Romania on September 10, 
1998; and
“SAAF Decision” means decision No. 585 on the establishment of the Rail Assets 
Management 
Company S.A., issued by the Government of Romania on September 10, 1998."
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Section 3.05 is amended to read:
“(a) Not later than June 30 of each year, the Borrower shall exchange views with 
the Bank 
and the Guarantor with regard to the implementation of the CFR 
Performance Contract, the 
performance of the Borrower's obligations thereunder, 
and the resource requirements and 
other actions necessary for the 
subsequent year in order to achieve the objectives stated in 
the CFR Performance 
Contract; and
(b)
except as the Bank shall otherwise agree, the Borrower shall not amend or 
otherwise 
alter the CFR Performance Contract or any provision thereof.”
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Section 6.01 is amended to read:
“Pursuant to Section 6.02 (l) of the General Conditions, the following 
additional events are 
specified:
(a)
Any Project Entity shall have failed to perform any of its obligations 
under  the 
Project Agreement to which such Project Entity is a party.
(b)
As a result of events which have occurred after the date of this 
Agreement, as 
amended,  an extraordinary situation shall have arisen which 
shall make it improbable that 
any Project Entity will be able to perform its 
obligations under the Project Agreement to 
which such Project Entity is a party.
(c)
The SNCFR Emergency Ordinance, the CFR Decision, the CFR Freight 
Decision, the SMF 
Decision, the CFR Passengers Decision, or the SAAF Decision shall 
have been amended, 
suspended, abrogated, repealed or waived so as to affect 
materially and adversely the 
ability of the Borrower to perform any of its 
obligations under this Agreement, or the 
ability of any Project Entity to 
perform any of its obligations under the Project Agreement 
to which such Project 
Entity is a party.
(d)
The Government of Romania or any other authority having jurisdiction 
shall have taken 
any action for the dissolution or disestablishment of the Borrower 
or any Project Entity, or  for the suspension of the operations thereof.
(e)
(i)
Subject to subparagraph (ii) of this paragraph:
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(A)
the right of the Guarantor, the Borrower or any Project 
Entity to 
withdraw the proceeds of any loan or grant made to 
the Guarantor, the Borrower 
or any Project Entity for the financing 
of the Project shall have been 
suspended, cancelled or 
terminated in whole or in part, pursuant to the terms 
of the 
agreement providing therefor, or
(B)
any such loan shall have become due and payable prior to the 
agreed  
maturity thereof.
(ii)
Subparagraph (i) of this paragraph shall not apply if the 
Guarantor, the 
Borrower or the Project Entity concerned 
establishes to the satisfaction of 
the Bank that: (A) such 
suspension, cancellation, termination or prematuring 
is not caused by the 
failure of the Guarantor, the Borrower or the Project 
Entity 
concerned to perform any of its obligations under such agreement; and 
(B) adequate funds for the Project are available to the Guarantor, the 
Borrower or the Project Entity concerned from other sources on terms and 
conditions consistent with the obligations of the Guarantor, the Borrower 
or 
the Project Entity concerned under the agreement with the Bank to 
which the 
Guarantor, the Borrower or the Project Entity concerned is a 
party.
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Section 6.02 is amended to read:
“Pursuant to Section 7.01 (h) of the General Conditions, the following 
additional events are 
specified:
(a)
the event specified in paragraph (a) of Section 6.01 of this Agreement 
shall occur 
and shall continue for a period of sixty (60) days after notice thereof 
shall have been 
given by the Bank  to the Guarantor and the Borrower;
(b)
any event specified in paragraphs (c) and (d) of Section 6.01 of this 
Agreement shall 
occur; and
(c)
the event specified in paragraph (e) (i) (B) of Section 6.01 of this 
Agreement shall 
occur, subject to the proviso of paragraph (e) (ii) of that 
Section.”
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Section 8.01 is amended to read:
“The General Manager and Chairman of the Board of Management of the Borrower is 
designated 
as representative of the Borrower for the purposes of Section 11.03 of 
the General 
Conditions.”
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The Borrower’s address, in Section 8.02, is amended to read:
“National Railway Company CFR – S.A. 38, Dinicu Golescu Blvd. 77113 Bucharest 1 
Romania
Telex: 11553 IFCFR R”
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The first paragraph of  Schedule 2 to the Agreement is amended to read:  
“The objective of the Project is to support and deepen the restructuring process 
of the 
railway system of Romania.”
Please confirm the agreement of Romania with the foregoing by having an 
authorized representative sign, date and return to us the enclosed copy of  this 
letter. The amendment shall come into force and take effect upon satisfactory 
completion of the Borrower’s review with the Bank of the report referred to in Section 
3.06 of the Loan Agreement, and upon provision to the Bank of satisfactory evidence 
that: 
(a)
the CFR Performance Contract and the CFR Passengers Performance Contract 
have been executed in a manner satisfactory to the Bank; and
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(b)
agreements have been executed by and between CFR and each Project Entity, 
in a manner satisfactory to the Bank.
As part of the evidence to be furnished to the Bank, there shall be an opinion 
or opinions satisfactory to the Bank of counsel acceptable to the Bank showing:
(a)
on behalf of the Borrower, that the amendment to the Loan Agreement is 
legally binding upon the Borrower  in accordance with its terms;
(b)
on behalf of the Guarantor, that the amendment to the Guarantee Agreement 
is legally binding upon the Guarantor in accordance with its terms; and
(c)
on behalf of each Project Entity that each respective Project Agreement 
is legally binding upon such Project Entity in accordance with its terms.
Very truly yours,
INTERNATIONAL BANK FOR 
   RECONSTRUCTION AND DEVELOPMENT
By /s/ Myla Taylor Williams 
Acting Country Director Bulgaria & Romania Country Unit 
Europe and Central Asia Region
CONFIRMED:
NATIONAL RAILWAY COMPANY S.A.
By /s/ Viorel Simut
       Authorized Representative
Date:  June 28, 1999
AGREED:
SOCIETATEA NATIONALA A CAILOR FERATE ROMANE
By /s/ Ovidiu Bobeica
       Authorized Representative
Date: June 28, 1999