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Romania: Government Launches Big Highway Project

On March 14, Romania's government announced a long-term road modernization program aimed at expanding the country's obsolete transportation infrastructure. The program covers an important part of a greater continental project, and the EU is providing some of the funding. But differences remain between the EU and Romanian officials concerning the routes of the future highways.

Prague, 28 March 2001 (RFE/RL) -- Romania this month announced a long-term program to expand and overhaul the country's antiquated road system. Under the program, 1,300 kms of highways are to be built over the next 15 years, at a cost of some $7.5 billion. A separate project to repair existing roads, due to span the same time period, will cost an estimated additional $7 billion.

The government says that the first three new highway sections -- totaling 250 kms near Romania's western border and around Bucharest -- are scheduled to be completed in the next four years. During a second stage, more than 500 kms of existing roads will be upgraded into highways linking Romania's western border with the Black Sea port of Constanta in the country's southeast.

Sergiu Sechelariu, a deputy transport minister, says the road project's 15-year timeframe could be reduced if the government can get extra funding. "We devised 15 stages of rehabilitation that should cover roughly 15, or maybe even 10 years, depending on Romania's capacity to attract external funding. For every loan we get from the World Bank, the EBRD (European Bank for Reconstruction and Development) or the EIB (European Investment Bank), [the institution] requests that we provide co-funding."

The proposed road overhaul is long overdue. Unlike other former Eastern bloc countries, Romania's communist regime largely ignored road building, choosing instead to invest in giant industrial projects. Now, more than 10 years after the fall of communism, Romania's roads remain badly in need of repair. Conditions are so poor that cross-country traveling time is significantly longer than necessary.

The largest country in southeastern Europe, with some 237,500 square kms, Romania has only 100 kms of highways and less than 15,000 kms of modernized national roads -- of which 80 percent require repair. Traffic in the country has increased by one-half since 1989, but only some 9 percent of the road network has been modernized.

Most of the highways scheduled to be built under the government program correspond to the Romanian section of the Pan-European Transport Corridor Four -- one of 10 corridors included in a European Union-financed project called the Transport Infrastructure Needs Assessment, or TINA.

TINA's goal is to modernize the transport infrastructure in EU candidate countries and connect them with the Union. The cost, projected over a period of 15 years, is to be partially covered by a funding program the EU calls the Instrument for Structural Policy for Pre-Accession, with a total annual budget of almost $1 billion for EU candidates.

Deputy Minister Sechelariu says Romania's road program was outlined in coordination with international financial institutions and the EU.

"[We discussed it] with the banks, with the [European] community, of course -- we asked for their approval, we even came up with a feasibility study."

The Pan-European Corridor Four will consist of more than 3,700 kms of highways and modernized roads. It will connect western Europe with its southeastern neighbors, passing from Germany to the Czech Republic, Slovakia, Hungary, Romania, and Bulgaria, and beyond to Greece and Turkey. In western Romania, the corridor will fork, with one branch heading south to Bulgaria and over a projected new Danube River bridge, and the second branch heading eastward through Bucharest to the Black Sea port of Constanta.

Romania has the least-developed road system of all the countries included in the Corridor Four plan. Hungary -- a country half the size of Romania -- has more than double the amount of modernized roads and more than four times the amount of highways. The Czech Republic has about 55,000 kms of main roads and 500 kms of highways, while Slovakia has some 18,000 kms of modernized roads and almost 300 kms of highways. Bulgaria has also built about 300 kms of highways.

EU studies confirm that Romania needs by far the greatest amount of long-term investment in road infrastructure. Simon Mordue, the EU's pre-accession programs coordinator for Romania, told our correspondent that Romania needs more than $10 billion over the next 15 years to bring its road network up to acceptable EU standards. Mordue says that much of the special ISPA funding is earmarked to go to Romania.

"Romania will benefit annually from between 20 to 26 percent of these [total IPSA] funds -- somewhere, if we take the middle figure, around 130 million euro ($110 million) per year."

But despite satisfaction with its EU funding, Romania is unhappy about the proposed route of Corridor Four's second branch heading to Constanta. The EU wants the highway to take the shortest path -- traveling through the southern Carpathians along the Olt Valley. The Romanians, however, prefer a slightly (60-km) longer route along the Prahova Valley, which they say will cost considerably less, since a modernized road already exists there.

Deputy Transport Minister Sechelariu argues that the longer route -- which connects Bucharest with Brasov, the country's second-biggest city -- is the most traveled in the country, with an average volume of 25,000 vehicles every 24 hours. It is also Romania's most popular route for tourists on weekends.

EU's Mordue says the dispute should be solved by using a team of experts to conduct a feasibility study on both routes: "What we have suggested, in agreement with [Romania's Transport] Minister, is that a feasibility study is [to be] carried out on this matter, and if it demonstrates that the re-routing of the corridor makes economic and financial sense, then that is a proposition we will discuss with him."

Mordue says that in the meantime, the dispute will not affect funding for the other sections of Corridor Four and Corridor Nine, which also passes through Romania. But the country will need to borrow even more money to keep both its highway and modernization programs afloat.

Analysts say that over the past few years, Romania has failed to secure more external funding because of a lack of solid development projects. But Sechelariu says the present government does have a secure roster of projects and will be able to get funding for its long-term road rehabilitation programs -- both from international financial institutions and private banks.

"We made projects, we have a lot of projects, and we are sending them everywhere, trying to attract funding -- not only from the World Bank, EBRD and EIB, but also from private banks."

Still, solid projects may not be enough to push the country into financial good health. Of the 12 active EU candidate countries, Romania is the most economically backward, with an average monthly salary of about $100. And with last year's growth in gross domestic product registering at just above 1 percent, economic recovery appears unlikely in the immediate future.