In 2014, the state will allocate funds to complete some projects now underway, such as the subway mainline of Drumul Taberei, Nadlac-Arad and Orastie-Sibiu highways, but also for projects that were finalized 2-3 years ago, such as Arad-Timisoara highway, in the context where the state still owes money to the builders of this road.
On the other hand, there are also four new projects, in the case of which the state will take the first steps this year, reads Business Construct magazine in its April edition. The projects are related to Comarnic-Brasov highway, set to be built under concession, Sebes-Turda highway, in the case of which the road company announced the builders late last year, the Universitate-Pantelimon subway mainline (no builder announced), as well as Bucharest’s southern ring road, to be built under concession.
Also, the Government wants to “revive” a project of Transylvania highway, namely Suplacu de Barcau-Bors section, half built by the US Bechtel, with which the state canceled the contract in 2013. Over RON256 million would be earmarked for the project in 2014, though no constructor has been named in this case, either, and the state needs to organize a new tender.
Instead, the Sibiu-Pitesti highway, one of the most highly expected highways in Romania, is not on this year’s list of priorities. The Craiova-Pitesti highway, for which the two car giants holding plants in the two cities have constantly pushed, is not on the list of the state’s most important projects in 2014, either.
Only four of the 20 projects are expected to be finalized in 2014. Overall, the state holds an investment budget of EUR3 billion for this year, up 12% against 2013, being thus the biggest investor on the construction market.
What are construction industry representatives saying about this year’s budget? “There could have been more courage and firmness in the earmarking of funds,” says Laurentiu Plosceanu, president of the Romanian Association of Construction Entrepreneurs.
In his turn, Florin Popa, managing partner of Vitalis Consulting construction consultancy, says the priority plan proposed by the government seems “viable” at least theoretically, but experience has showed many of the projects that seemed good in theory proved to be failures in practice.
“The problem is not necessarily how much money is invested in these projects, but how this is spent and in Romania we do not seem to have learnt very much about the concept of efficiency,” states Popa.
The lack of such a concept has been seen in the high costs the state has been coping with in recent years in terms of infrastructure building.
In the context where in recent years the state has focused on social expenses in detriment of investment, another source through which transport infrastructure can be developed are European funds, which have not been used to the full.
Romania has drawn less than a third of the EUR4.4 billion Brussels has allotted for it in 2007-2013, so that another EUR3 billion could be spent on highways, railways or subway.
The largest EU-funded transport infrastructure projects include Coslariu-Sighisoara railway, Lugoj-Deva highway or Drumul Taberei subway. The money left undrawn will be lost after 2015, so that the state should put these funds on top of its priority list in the next 20 months.
However, construction industry growth also depends on continuity. The continuity of ministers, of company managers, of priorities and earmarked funding.
Having an electoral year in front of them, during which the state traditionally earmarks more money for infrastructure, construction players need to compete in the same field of public works given that macro data has not persuaded private investors to move again for the time being.
(English version by Catalina Apostoiu)