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Romania needs 70 bln euro for transport infrastructure (expert report)

constructii drumuri

Investment needs for Romania's transport infrastructure are in excess of 70 bln euro, whereas according to the Transportation Masterplan, the resources available by 2030 stand at 36 bln euro, shows an expert report by Euler Hermes released on Wednesday. 

Despite that, the transportation sector is going through a favorable period which stands in direct connection to the economic context, characterized mainly by the increase in private consumption that advanced more than 10 percent in 2017. 

In this context, road freight accounts for almost a quarter of Romania's total export of services last year that amounted to 20 bln euro. 

Despite that infrastructure stays a major hindrance to the sector's development and broadly of national economy (with mere 800 km of motorway and another 60 km expected to open in 2018). The quality of infrastructure is one of the factors considered for the indices measuring economic competitiveness, like the WEF Global Competitiveness Index where Romania dropped six positions in 2017 from the year before, being ranked 68 out of 137 countries. Solutions to cover the financing needs are accessing financial instruments such as structural funds and the European Fund for Strategic Investments, as well as using public-private partnerships to better orient projects towards the economy's concrete development needs, the report concludes. 

According to the document, the transportation market is dominated by road transport and related industries and is mainly directed to the Community space that accounts for over 90 percent of transports carried out. 

More than 35,000 companies and registered sole traders operate over 180,000 vehicles, employing about 360,000 professional drivers but less than 100 companies own more than 100 trucks. 

Romania's transport industry is estimated at 5 - 6 bln euro, the equivalent of 5 pct of GDP. 

The drivers of sector growth are integrated storage and transport services (that supply the continuously expanding modern retail), courier services (due to electronic trade the courier market increased to over 400 ml euro in 2017) and the transport of auto parts and subassemblies (in line with the fast-paced growth of the automotive industry). 

Romanian carriers remain competitive in terms of prices compared to Western Europe, yet this advantage is eroding because of growing costs (with civil liability insurance policies and the minimum national wage) and the enforcement of European regulations (the mandatory rest breaks and rules on employee posting). Moreover, economic growth comes with a deficit of skilled workforce which limits development opportunities as an effect of reduced investment in relevant automation and IT systems (seen by some as useless and too costly), the experts note. 

The sources of the data presented in the cited survey are: the National Institute for Statistics, Romania's National Road Haulers Union, the World Economic Forum Global Competitiveness Index 2017-2018, the Major Companies in Romania 2018 report by ZF & Deloitte and the Euler Hermes survey "Payment behavior - Euler Hermes Economic Research".


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