Most constructors relied on contracts won previously, considering that last year the state organized few auctions to build roads, railway lines and water supply and sewage systems. Political disputes in the first half of 2012, with three different governments coming to power in only a few months, made private investors postpone new projects.
The largest ten constructors on the local market registered aggregate turnover of about EUR1.5 billion in 2012, according to calculations by Business Magazin based on data from companies and the Trade Registry. Their combined market share exceeded 15% considering that the Romanian construction market was estimated at about EUR9 billion last year.
Austrian group Strabag was leader on the local market in 2012 regarding turnover, which exceeded EUR370 million, up 80% on the year. Its turnover was boosted by large contracts, including those to build the Deva-Sibiu highway and Sky Tower in Bucharest, Romania’s tallest office building.
Strabag said in a report Romania was among the markets with the weightiest contribution to the group’s total turnover last year.
Constructor Straco Group, controlled by businessmen Alexandru and Traian Horpos, came second last year with 123% higher turnover, of about EUR200 million. The company’s portfolio includes mainly contracts signed with the state, such as the projects to build the Deva-Orastie highway and modernize the Vintu de Jos-Simeria railway line.
Straco was followed by Italian firm Astaldi, whose turnover was flat on the year at EUR150 million. The constructor won some of the largest construction contracts awarded locally, worth hundred of million euros, including the construction of the Basarab passageway in Bucharest, National Arena in the capital and the Cernavoda-Constanta highway.
On the other hand, Romanian constructor Hidroconstrucția registered a decrease in turnover last year to EUR140 million, 40% lower on the year, due mainly to the problems faced by its main client, state-owned hydropower producer Hidroelectrica, which entered insolvency in June 2012.
Spedition UMB and Tehnostrade, owned by Romanian businessman Dorinel Umbrarescu, also saw lower turnover last year, by 26% and 9%, respectively, according to Business Magazin calculations.
The two firms registered combined turnover of EUR261 million in 2012 and profit of EUR37.7 million, down 41% on the year.
Delta ACM 93, controlled by businessman Florea Diaconu, reported 71% lower profit for 2012, of some EUR3 million, due to fierce competition for the few projects on the table. However, its turnover increased to EUR113 million.
Diaconu expects Delta ACM 93’s profit will halve in 2013 considering that only a few infrastructure and private construction projects will go on the block.
Optimistic scenarios show the local construction market will stagnate this year.
China and the United States have invested massively in construction over the past years to stimulate economic growth, while Romania cut funds for infrastructure projects drastically in 2012 and 2013. Moreover, the country’s EU-funded program for transport was blocked for more than a year due to money mismanagement.
National roads authority CNADNR, which has become constructors’ main client, signed new road construction contracts worth only EUR6 million in the first half of 2013.