Last updated: 29 April 2016
Why do you consider Romania to be an attractive destination for foreign investors from the infrastructure (roads) perspective?
Romania holds a strategic position on the three Pan-European transport corridors and this is an important enough factor to raise the investors’ interest. On the other hand, statistics show that Romania is now ranked among the last places in the EU in terms of highway kilometers per inhabitant. This situation creates the prerequisites for a need to develop infrastructure, including from the perspective of the European community.
Aside from this need to regionally develop infrastructure – for transport, in general – there is a local demand from businesses. In fact, the lack of a uniform infrastructure at the national level generated the transformation of certain regions in actual enclaves, causing their economic underdevelopment.
Finally, infrastructure is an attractive sector for investors not only in terms of market dimensions (the large number of projects that can be developed), but also in terms of resources available to the State (European funds, State budget funds, funds from other financial institutions). For 2016, the Romanian State already announced a series of projects which it would fund from the State budget with over 670 million Euros (railway modernization, construction of highways and tube lines). Furthermore, the Large Infrastructure Operational Programme (POIM) makes available to Romania 11,8 billion Euros, out of which 1,7 billion Euros are allocated to Priority Axis 2 (Development of a multi-modal, sustainable and efficient transport system).
What are the main issues that should be improved in this field?
Infrastructure is Romania’s Fata Morgana. Projects developed in this sector are numerous, feasibility studies have also been made, but what lacks – despite public declarations – is the political class’ commitment to the development of the transport infrastructure, in general.
Romania urgently needs a country project focused on infrastructure, able to support the uniform development of all regions, in order to attract investments and correct major economic, social and demographic gaps.
Therefore, the main objective of any government, regardless of electoral cycles, should be attracting foreign investments and creating equal chances for the economic development of all Romanian regions.
How could be encouraged the infrastructure projects in order to be more effective and develop in time in Romania, without delays?
The Ministry of Transport’s list of priorities for 2016 contains no less than 15 projects, each worth several million Euros, 9 of which exclusively for the development of road infrastructure (Timişoara-Lugoj, Lugoj-Deva, Sebeş-Turda, Câmpia Turzii-Ogra-Târgu Mureş highways, the 9th route corridor: Ploieşti-Buzău-Focşani-Bacău-Paşcani; Braşov-Comarnic, Craiova-Caransebeş, Bucureşti-Craiova, Braşov-Predeal highways, Sibiu-Pitesti etc.).
However, it is important that such project actually materialize and, in order for this to happen, we need a transparent process, unaffected by the political climate.
Procedures should also be simplified and rendered less difficult and the accountability of contracting authorities that do not fulfil their obligations should be increased.
Hence, the logical sequence must be: political will, consensus, integrity. I would also like to add that there is a need for an increased pressure on policymakers from employers and economic actors, for the projects to be commenced and implemented. Romania lost and still loses important investments, which migrated to our neighbor exactly because our lack of infrastructures.
What are the main legal tools that can be used in this regard?
The legislation – both primary and secondary – is largely aligned or pending alignment to European directives, but the issue its uniform application. Deficiencies in applying legislation endanger project development and also affect free competition on the market.
At present, public procurement legislation mainly consists of Government Ordinance no. 34/2006 on the award of public procurement contracts, public works concession contracts and service concession contracts and the implementing norms of the said Ordinance. There is also a law (Law no. 178/2010) on public-private partnership, which is, unfortunately, outdated.
Public procurement legislation is undergoing a complex amendment process, especially due to the need to transpose into the national legislation, until April 18, 2016, of the directives applicable to public procurement, approved in 2014 by the European Parliament.
Thus, also based on the issues raised during the 10 years of enforcement of the current legislation, in 2015, Romania conceived a National Public Procurement Strategy and the Government drafted a legislative package consisting of 4 laws regulating this sector (law on public procurement, law on remedies and appeals concerning the award of public procurement contracts and concession contracts and concerning the organization and functioning of the National Council for the Settlement of Complaints, law on sectorial procurement and law on works and service concessions). Furthermore, a law referring to conflicts of interests in the award of public procurement procedures initiated through the public procurement electronic system (SEAP) was also passed.
This entire legislative package is undergoing parliamentary approval and, unfortunately, although announced, its entry into force on January 1st, 2016, did not take place.
New legal provisions applicable to public procurement procedures will introduce new value thresholds for various types of contracts.
Another important new element is the fact that “best-value” award criterion will be favored, instead of the “lowest price” criterion, which is currently being preferred.
The said legal provisions will also introduce new rules applicable to subcontracting. They will especially provide the contracting authorities’ possibility to pay subcontractors directly for the services and works the latter provide to the main contractor, if such payment is allowed by the contract and if the subcontractor expressed its option in this respect.
Interview published in Invest in Romania Guide of the Business Review, March 2016