Unlike other state-funded projects, this time the construction companies need to secure the money needed for the works by 2013, when payments from the Ministry of Development, which is in charge of the program, are set to begin.
“We are holding talks with the banks, we will also use the bank letter of guarantee from EximBank in order to ensure the financing,” said Gheorghe Racaru, strategy management of Romstrade. The company has won two PNDI contracts so far, in association with other firms, and is one of the few companies who have already signed the contracts.
However, EximBank has not yet issued any such letter, although the Development Ministry says over the next few days it will give the order for the design of works to start for some of the roads.
Starting in August, eight of the 20 contracts for the rehabilitation of county and local roads have been awarded, worth the equivalent of EUR1 billion out of the estimated EUR2.6 billion program. However, only three of these contracts have been signed so far, with the remaining ones being in the process of being signed or within the legal deadline for appeals.
“It is estimated that the order to start the design stage of the works will be given next week,” according to the Ministry of Regional Development and Tourism.
Asked who will cover the interest costs associated with taking a loan from a private bank, Racaru explained these were internal details, which were taken into consideration since auction stage. “We made our calculations and it resulted that we would not lose money, otherwise we would not have participated in the auctions at all.”
While EximBank says no bank letter of guarantee has been issued so far, some construction companies are still unsure as to how they will finance their projects.
“It is a long story. Mayors of beneficiary towns phone winning firms to ask them when they will start the projects. So far, we have not signed and we cannot sign the contract in its current form. It would, indeed, be the right thing for an EximBank guarantee to be provided, but this would entail it being included in the [budget] deficit,” says Georgica Cornu, a Timisoara businessman who controls construction company Confort, which was awarded, alongside Bring Consult and Triskele, an over EUR120 million contract to modernize county and local roads in Hunedoara and Timis.
“Execution takes place between 2011 and 2013; payment is made between 2013 and 2020. Works are not billed or delivered until a month before payment. If a work is paid in 2014, it is billed and delivered then, although it is used in the meantime,” he explains, saying that from his point of view the PNDI program is still quite unclear.
(English version by Daniela Stoican)