This is the main impact of the lack of a proper transport infrastructure on the local economy, yet despite the clear need for investments in this department, the government decided to cut 1 billion lei (EUR226 million) of the 14 billion the Transport Ministry had been allocated this year.
The reason for the downward adjustment was that the Transport Ministry had been unable to spend its allocation in the first half.
“We cannot have trade or industry without infrastructure. This is undermining of the national economy. The lack of infrastructure translates into much higher costs for companies,” says Andrei Mocanu, general manager of debt collector Kredyt Inkaso.
He says that even the industry his company operates in is affected by the lack of developed transport infrastructure, which renders it unable to sell real estate at the prices set by appraisers.
“We try to sell at as little as 50% of the price estimated by specialized valuation companies but some properties cannot be sold because of the lack of infrastructure.”
Kredyt Inkaso, the local subsidiary of the Polish group by the same name, doubled the total non-performing loan portfolio managed to some EUR600 million in the past year.
“There are no beltways in the country. The southern section of the Bucharest beltway is a disaster; trucks loaded with goods spend four hours there. (…)”
“Money is the lifeblood of an economy, but infrastructure is its arteries and veins. If there is no infrastructure, the money does not flow and companies are unable to develop,” says Adrian Garmacea, general manager and shareholder of PVC trim, interior and garage doors manufacturer Electric Plus in Bacau, which sells its products under the Barrier brand. The company posted more than RON68 million revenue last year.
His business is suffering from the lack of the a developed infrastructure because trucks going from Bacau to Timisoara, for instance, take 14 to 16 hours to reach their destination, when they should do it in 8 or 9. This increases costs and delivery time, which hurts competitiveness. A developed infrastructure would mean lower costs and allow the company to hire more people and give raises to the existing employees, he adds.
Romania has fewer than 700 kilometers of highway, national roads that have yet to see asphalt and its railroad network is in need of urgent rehabilitation, considering passenger trains travel at only 43 kilometers an hour and freight trains at an average speed of 23 kilometers an hour.
The recent RON1 billion cut of the Transport Ministry budget (which includes the budget of Romania’s company in charge of highways and national roads CNADNR) comes after a disappointing spending in the first half, as Finance Minister Eugen Teodorovici has recently said.
“The solution was not to take the money from the Transport Ministry, the solution was to find a team capable of spending it. Quality management, experts are needed. It feels as if we’re in this weird movie,” says Adrian Mihai, co-owner of Fan Courier, the largest private courier service provider, which posted RON334 million revenue last year.
(English version by Loredana Fratila-Cristescu)