NEWS IN ENGLISH

Interview with the Vice Prime Minister of Romania and the Minister of Transport, Sorin-Mihai Grindeanu

  • In the context of the war in Ukraine and threats to security in the Black Sea region, the role of Romania and the Port of Constanța in regional connectivity has become a substantial one. How do you see the reconfiguration of this area of maritime and rail transport in the Black Sea area?

The strategic role of Constanța Port as a regional cargo hub is more significant than ever, becoming an essential route for cargo traffic in the area. The port of Constanța has become a vital maritime hub for the connection between Western and East-Central Europe with Central Asia, the Far East and North Africa. The importance of the port is also given by the strategic naval connections with the Danube, but also by rail or road, both with other member states of the European Union and with states outside the EU space.

In the current context in the Black Sea region, the stability, security and investment climate that Romania offers are assets that profile us as a turning point between Asia and Europe. In addition, the port of Constanța is an important factor in this context by reconfiguring transport routes.

On a global level, the port of Constanța has become part of an important corridor for the export of grain to the countries that need it the most, with a defining role in avoiding a food crisis. Let’s not forget that Ukraine is a world-leading grain exporter, and countries in Africa and Asia in particular depend on Ukrainian production.

 

  • From the beginning of this year until now, numerous road infrastructure projects have been started. What can you tell us about the improvement of the legislative framework in the development of infrastructure projects?

In order to avoid the lack of coherence at the national level in the implementation of projects in the field of road infrastructure, the Government of Romania adopted in 2021 the Investment Program for the development of transport infrastructure through which clear objectives were established for the period 2021-2030.

This Program has a triple role: prioritizing investments; updating the implementation strategy of the General Transport Master Plan of Romania, adopted in 2016 and that of the reference framework document for the relevant public policies and for all institutions involved in achieving the national transport infrastructure objectives.

Based on the established priorities, a strategy was developed to ensure the necessary financing for the 10 years of implementation, starting from the correlation of the main sources of financing available to Romania, respectively: Romania’s National Recovery and Resilience Plan (PNRR), Transport Operational Program (POT), Connecting Europe Facility (CEF 2.0) and the national budget.

We can thus say that the Investment Program aims at an efficient route of the projects so that at the end of the decade a large part of the development gap compared to the other Member States of the European Union is recovered.

Regarding the improvement of the framework, necessary for the development of infrastructure projects, the year 2022 represented a crucial year for Romania, in the context of the economic crisis and the major objectives of relaunching the economy and resuming sustainable development. Thus, a series of legislative changes were adopted both in the field of public procurement and in the field of transport, infrastructure of national interest.

 

For a more complete picture of the benefits, I can tell you that the main changes in the public procurement sector are aimed at: ensuring a simple, clear, stable and predictable regulatory framework that facilitates public investments; increasing the rate of absorption of funds available through the PNRR in the context of the initiation of the PNRR implementation procedure; the correlation of primary and secondary legislation to avoid a non-unitary interpretation of the concepts, but also to ensure the alignment of legal provisions with the current economic and social reality and last but not least, improving the performance of public authorities in the administration and organization of investments.

These improvements are already showing their effects and have led to the implementation of projects in the field of public investments in a shorter period, by reducing the time required to obtain the related technical approvals, by simplifying the conduct of public procurement procedures and by avoiding the loss of funding.

 

I want to remind you of the main changes adopted by the Government Emergency Ordinance no. 26/2022 in the field of public investments:

The price update can now be done after 6 months from the conclusion of the contract and not after 12 months as provided by the old regulations.

The beneficiaries of the contracts will be able to pay subcontractors and suppliers directly, and in the event of termination, another builder will be able to take over the contract.

If the works do not advance at a sustained pace, the builders will be notified only 3 times, before termination, after which the tender procedure can be entered without publication.

The obligation to issue a certificate of good conduct every 3 months was introduced into the legislation.

Also, the authorities will obligatorily take legal steps to withhold the bonds of companies that lose appeals.

The lands from the public property of the state and under the administration of public entities will be transferred to the administration of the expropriator, together with the decision of the Government by which the initiation of the expropriation procedure is approved. At the same time a right of temporary administration is established in favour of the beneficiary of the project to carry out the works on the lands located in the minor riverbed, without the need to complete other formalities;

The Ministry of Transport and Infrastructure now has exclusive competence for approving specific technical regulations regarding engineering constructions for transport infrastructure of national interest;

A term of 15 calendar days was established from the submission of the request for the issuance of Town Planning Certificates and building permits and of 10 calendar days for the issuance of the approvals requested through the town planning certificates.

If the submitted documentation is not complete, these entities can make observations only once, after the actions the beneficiary takes according to the clarification requirements, and they cannot issue further requests after that.

If the authorities do not issue the notices or authorizations within the established terms, it is considered that the documentation submitted by the beneficiary is compliant and complete, and in this case, those authorities are obliged to issue the authorizations within 5 days.

If this 5-day period is not respected either, it will be considered that the respective documents have been tacitly issued.

The tacit issuance also applies if the officials of the Ministry of Transport and Infrastructure do not issue the Construction Authorization in a timely manner.

Changes have also been made regarding guarantees of good performance, either through successive withholdings from the amounts due for partial invoices, or by combining two or more of the methods of establishment provided for by law, such as bank transfer for part of the amount, withholdings successive amounts due for partial invoices for another part of the amount and guarantee instruments issued by an insurance company for the third part of the amount.

 

Through this year’s legislative changes, we introduced other measures aimed at the smooth running of large infrastructure contracts.

It is now possible, for example, to negotiate without publication, in the conditions where transport infrastructure contracts of national interest are terminated only due to the exclusive fault of the Contractors, which leads to shortening the times for relaunching the works.

The possibility for the Beneficiary to issue some ascertaining documents during the execution of the contract, every 90 days, not just upon completion of the works or services contract was also introduced. This measure will prevent undisciplined Contractors from winning further bids.

The situation of the adjustment of contracts for the purchase of works and products due to unpredictable causes generated by three successive crises was regulated: the post-pandemic situation, the armed conflict in Ukraine and the energy crisis. This measure comes in support of those serious Contractors who want to continue the contracts, but who encounter financial difficulties caused for example by the price increase of the necessary construction materials.

 

  • What projects does the Ministry of Transport have in progress to modernize the National Railway Company „CFR” SA?

In order to develop regional connectivity in the field of railways, are projects with The Republic of Türkiye also targeted?

Currently, CFR SA is preparing a series of projects, with non-reimbursable external funding, in different stages (development of feasibility studies or design), some of which will connect with the southern border of Romania and implicitly can ensure connectivity with The Republic of Türkiye.

I am talking about the rehabilitation of the railway line Craiova – Caransebeș (225.287 km); the modernization of the railway infrastructure in Port Constanța (271.4 km – single line); rehabilitation of the railway line Ploiești Triaj – Focșani (43 km); rehabilitation of the Focșani – Roman railway line (147 km); rehabilitation of the railway line Roman – Iași – Border (140 km).

 

To these the rehabilitation of the railway lines Pașcani – Dărmănești (71 km) and Dărmănești – Vicșani – Border (34 km) is added.

 

In addition, there is the modernization of 47 railway stations in Romania, including the North Railway Station in Bucharest, the rehabilitation of 149 bridges, underpasses and tunnels, the modernization of 150 railway level crossings and the modernization of the Bucharest North railway line – Jilava – Giurgiu Nord – Giurgiu Nord Border (80 km).

 

Moreover, the electrification, modernization and rehabilitation works that we have in mind do not stop here.

For electrification, we can also talk about the Constanta-Mangalia (43 km) and Rădulești – Giurgiu (57 km) railway lines, and for the modernization of the Bucharest – Craiova railway lines (206 km); Coșlariu – Cluj Napoca (99 km); Apahida – Suceava (310 km).

The lines and facilities in the Bucharest Railway Complex (605 km) and a railway section on the Predeal – Brașov route will also be modernized.

 

And last but not least, we have in the project the rehabilitation and electrification of the Craiova – Calafat railway line (106 km), the modernization of the Bucharest – Henri Coandă International Airport railway line – phase II and the implementation of the ERTMS system on the Predeal – Bucharest railway section – Constanța, as well as the extension of the GSM-R system on the primary rail transport network (367 km).

As a conclusion, I can say that Romania is in full process of massive modernization including in the field of railway transport.

 

  • Between September 26 and October 14, 2022, Romania hosted the 21st edition of the Conference of Plenipotentiaries of the International Telecommunication Union, an event of major importance for the information and communication technology (IT&C) sector worldwide, whose organization in Romania you obtained during your mandate at the head of ANCOM. What position does Romania rank in the field of telecommunications?

 

I can tell you that at the national level, compared to the year 2021, revenues from the provision of electronic communication networks and services have registered an annual increase of 2%.

The sum of 17 billion lei was thus exceeded, which represented a share in GDP of 1.45%.

Moreover, the entire ICT sector, which includes both the telecommunications field and the IT area, contributes to approximately 7% of Romania’s GDP. Practically, the IT and Telecommunications sector has come to constitute an important component of the labour market in Romania, also due to the fact that approximately 180 thousand people work here, which represents approximately 2.7% of the total number of employees.

In addition, at the European level, Romania can be proud of the proportion of female ICT specialists in the workforce, where we are in 2nd place, but also in terms of the number of graduates in the ICT field, where we are in 4th place.

Returning to the electronic communications sector, I can tell you that 85% of fixed internet connections in Romania allow download speeds of at least 100 Mbps. In 2021, it was even found that the number of fixed internet connections increased by 7%, especially in rural areas, which is a good signal regarding the reduction of the digital gap between rural and urban areas.

Next, the main issues that we need to solve, as noted by the latest edition of the Digital Economy and Society Index (DESI) 2022, are those related to the integration of digital technologies and digital public services as well as the increase of digital skills with impact in the field of electronic communications.

In this sense, Romania’s Recovery and Resilience Plan includes significant measures for the full integration of digitization in all dimensions of DESI, namely digital skills, connectivity, support to businesses and digital public services, with around 6 billion euros planned for investments.

 

  • In March and April of this year, you had official visits to The Republic of Türkiye and Abu Dhabi, in Istanbul you co-chaired the 27th session of the Joint Commission for Economic Cooperation Romania with the Vice-President of The Republic of Türkiye, Fuat Oktay- Turkey (JEC). The Economic and Investment Forum organized on the sidelines of JEC recorded a record number of participating companies, both from Romania and The Republic of Türkiye. What are your recommendations for foreign companies that want to invest in Romania?

In accordance with the Protocol concluded within the framework of the Joint Commission that took place in Istanbul on March 28-29, 2022, transit traffic for goods transport vehicles has been liberalized since May 1 this year (2022).

 

To have an overview, I can tell you that the number of vehicles registered in The Republic of Türkiye that entered Romania between 01.01.2021 and 31.10.2021 was 232,369, of which: in transit, 183,656 vehicles; for direct traffic, 40,597 vehicles and for traffic destined for a third country, 8,116 vehicles.

In the period 01.01.2022 – 31.10.2022, 320,440 vehicles entered Romania, of which 266,253 were in transit; for direct traffic, 47,043 and for traffic destined for a third country, 7,144 vehicles.

 

I can assure foreign companies that want to invest in Romania that the national transport infrastructure is in continuous and accelerated development, which will lead to increased mobility both at the national and regional level. Moreover, this development, along with Romania’s positioning in the current geo-political context, offers substantial business opportunities.

I can also recommend Companies with the potential to develop activities that integrate on the Romanian port platform, not to hesitate to direct their attention to Romania.

There is an obvious interest in Romanian seaports, especially for its major projects, to increase capacity, projects that can be realized in the medium and long term. We are already in advanced discussions for important investments, which will lead to the expansion and acquisition of new port territories.

 

At the same time, the Constanța port area is optimal for investments in logistics centres, for the development of new economic activities to support the transit of goods.

 

Of course, we are interested in increasing the connectivity of the port of Constanța with other Black Sea ports, in order to attract cargo traffic and new business opportunities.

 

In the field of infrastructure, I reaffirm that as deputy prime minister and holder of the transport portfolio, I trust that including Turkish construction and engineering companies will have the ability to take advantage of the opportunities offered by PNRR, by successfully completing the large infrastructure objectives.

 

With a budget of 29.2 billion euros, of which 60%-70% is intended for the creation of new infrastructure networks, PNNR can represent a good opportunity to ensure and strengthen the economic climate in Romania.

Thus, serious entrepreneurs, among whom I express the hope that there will also be those from Republic of Türkiye, will have an additional reason to invest here.

As you know, for Romania, the development of transport infrastructure is a medium and long-term strategic objective, reflected by the General Transport Master Plan of Romania and its Implementation Strategy, as national tools for planning, prioritization, scheduling, financing and implementation of major interventions for the period 2016-2030.

Building together is proof of a common perspective of development, whose main value is connectivity, and here, including the expertise of Turkish companies, can constitute, in the coming years, the basis of their success in Romania.

Since the beginning of the mandate, the Government has had a permanent dialogue with the representatives of the business community and representative organizations.

We promised not to come up with new taxes and not to increase the existing ones, and we kept our word.

We have provided stability, consistency and predictability without which business plans cannot be developed.

We are committed to being the government that supports investments and have allocated the largest amount for investments in the last 32 years: over 90 billion lei from the state budget.

This government policy has also benefited from the dynamics of foreign direct investment, reflected in an increase of more than 43% in the first seven months of this year, compared to the same period last year, as well as an increased rate of absorption of European funds.

The modernization and development of the country benefits from a financing package of 90 billion euros from European money, which we will use until 2029.

The effects generated in the economy will multiply the impact of these impressive sums.

Meanwhile, new challenges have been added to face, most of them related to energy resources. Romania is committed to investing in order to become an energy security pole in the region and we are on the right track in this direction.

At the same time, we support the green projects we committed to through the National Recovery and Resilience Plan (PNRR/PNRR), because we will overcome this energy crisis at some point. The transition to climate neutrality is a goal that must not be abandoned, alongside the energy transition and digital transformation.

Romania, through the Ministry of Transport and Infrastructure, is open to all companies with technical and financial capacity that can successfully carry out the contracts they obtain following the tenders they participate in.

For companies already present in Romania, or for those interested in expanding their business here, I reiterate the invitation to get involved in the numerous projects included in the new Investment Plan and in the National Recovery and Resilience Plan, seriously. I trust that Turkish investors have the ability to realize these opportunities with concrete results, for the benefit of both countries.

 

Interview by Aylin Asan.