| Can you tell us very briefly what are the main areas and tasks covered from your Secretary of State?
Within the Ministry of Transports I am in charge of the railway transportation department and of roads transportation. Within this activity I organized the legislative reform in these two fields in the idea to align them to the European Union legislation. Overall the Ministry of Transports in a proportion of more than 70% has aligned its legislation to the European one and from this point of view I can say that we are the first Ministry with such a high grade of alignment to the European legislation. Following this I also took care of the restructuring in the railway and road transportation. I promoted and followed investments in these two fields and I have analyzed the technical and financial state of the companies under the subordination of my department: the railway companies and the activity of the national administration.
Can you tell us what are the most important road infrastructures being modernized in this moment?
I will start with a short presentation of the Romanian road network.
The network's total length is of 73.260 km (not counting streets in the cities) from which 14.683 km are national roads (20%), 113 km are highways (Bucharest-Pitesti and Fetesti-Cernavoda between the two of the Danube's branches) and 58.577 km are district and communal roads.
The density is very small compared with other countries in Europe: 0,64 km/square km.
The modernization grade is as follows: 24,6% are modernized roads and 28,4% are roads with light covers (thin asphalt).
The national road network absorbs approximately 70% of the road transportation even though it represents only 14,000 km. The modernization grade of the national roads is as follows:
91% have modern covers.
8% have thin asphalt covers.
1% are paved with stones.
4.508 km are of roads opened to the international traffic (E roads).
The road infrastructure is administered by the National Administration of Roads.
The Ministry's first priority in the road networks field is the rehabilitation of these roads because many them are very damaged. For this there is a program which has been divided in four steps and it developed as follows:
The first phase has been finished in 1998 and there were 960 km of national and European roads rehabilitated: Bucharest-Urziceni; Bucharest-Pitesti-Rm.Vilcea-Sibiu; Urziceni-Slobozia and others.
The second phase, which started in 1998 will be ended this year: 700 km with a value of US$ 553 million. Some of them have already been paved in a proportion of 55%.
The third phase has already started (the so-called Moldova phase) and we are making the roads wider. This phase has 608 km and it is supposed to be finished by 2003. The financing of 422 km has already been insured by EBRD, EIB and PHARE funds from EU. Soon we will start financing the works from the ISPA founds.
There is also a fourth phase of more than 1000 km that has not been approached yet.
We hope that at the end of all these four phases, around 2006, all the roads to be almost rehabilitated.
We also have a program for the highways network development which has been approved by the Government and which will be done as we will have the founds, mainly from external resources.
The highways network development plan in Romania
First phase: 397 km, on the following directions:
Bucharest-Pitesti: 96 km, the modernization of the already existing highway, at the end of the year 2000. The operation and maintenance of the highway will be done through a toll system according with our agreement with the EBRD since it was half financed by them and half by the Romanian Government;
Bucharest-Constanta: 201 km: we will continue the works in the direction Bucharest-Fetesti-Cernavoda (151 km) in the year 2000 with finances of 200 million EURO from the European Bank for Investments and the Romanian Government.
An express road Bucharest-Giurgiu: 47 km with four lines.
The south belt of Bucharest which is the link between the three highways of 57 km.
Development of belts, thus offering the possibility of avoiding five big cities: Pitesti, Sibiu, Deva, Orastie and Sebes. There will be belts as highways around the cities as part of the future highway which links the European corridor no. 4.
Second phase on the directions:
Nadlac-Arad-Deva-Sibiu-Pitesti. In this way corridor no.4 will be completed.
Bucharest-Brasov that is the national road with the highest traffic in Romania.
The fourth phase: 2600 km with long term execution after 2010.
We need further founds which will come through the ISPA program from the European Union and from loans guaranteed by the Romanian State and from international banks. We are interested to attract private capital both to finance and execute the works.
But the construction of roads is a very expensive thing. How are you planning to attract all the foreign investors needed?
All these infrastructure constructions that are financed from IFI founds are contracted through international tenders. There are a lot of companies who won these tenders from France, Germany, Austria, and Romania based on their advantageous offers.
Last year we had a tender to concession a highway - the first package of highways Bucharest-Pitesti - (only the operation because the construction was done by us) Bucharest-Constanta, the south belt of Bucharest and Bucharest-Giurgiu. There were four companies from Germany, Austria and France but unfortunately we could not find any World Investment News Ltdr because the conditions they required were more than the Government's possibilities. The most important one of these conditions was the insurance of an initial fund of US$ 170 million besides the traffic guarantee. We will probably try again the concession and hopefully we will have more success this time. | What can you tell us about the modernization of the railroads?
As I have already mentioned for the roads, the number one priority in the railroad infrastructure is the rehabilitation and modernization of the already existing lines. Because of the lack of money we are behind with the works and the trains have delays and cannot run at high speeds. The maintenance activity of the railroads is subventioned by the Government. Through Romania two important corridors run beside the Danube. First is the corridor no.4 which is both for roads and railroads, with the southern branch from Timisoara-Orsova-Calafat-Sofia-Alexandropolis, and the main branch which links the west with the east Berlin-Budapest-Bucharest-Constanta. And then there is the corridor no.9 Helsinki-Petesburg-Moskow-Kiev-Odessa-Chisinau-Iasi-Bucharest-Giurgiu-Alexandropolis. The number one priority is corridor no.4 and priority number two is corridor no. 9. Corridor no.4 for roads is coming through Sibiu-Pitesti-Bucharest. We have elaborated the feasibility study for the entire corridor of 880 km and for Bucharest-Ploiesti-Brasov and Bucharest-Constanta. We already have a financing from the European Bank for Investments for Bucharest-Brasov (200 million Euro for 170 km). Now there is a tender taking place for the works between Bucharest-Ploiesti-Brasov, after the pre-selection there were left 6 big international companies from Europe and we are waiting for the World Investment News Ltdr to start the works this year.
At the end of the rehabilitation the passenger trains will be able to run at speed of 160 km/h which is an intermediary phase towards what Europe has at this time. For freight trains speeds will reach 120 km/h. Speeds higher than 200 km/h will be approached in the next phase, because in the meantime we also have to adapt our equipment of wagons and locomotives to allow maximum speeds.
We are on the way to close a loan agreement with the Japanese Bank for International Cooperation at the Bucharest-Constanta railroad and we hope it will be solved and that the tender will take place. After that will follow Brasov-Deva-Arad for which we will use also ISPA founds.
Is it the Ministry carrying out these reforms directly or is it done through one of a CFR (railroad companies) that you are doing this?
The Ministry is the one who negotiates these loans agreements. Here at the Ministry we have also done the development strategy because all these funds are guaranteed by the Government through the Ministry. The National Companies and Societies manage the projects and the tenders subordinated to them. The Ministry just makes the strategy and gets these funds from international loans or from the national budget.
Of course we can imagine that there is an interest of private capital for the execution and operations and the return of the invested money through the access tax on infrastructures. Let me give you an example: there is an Italian company who won a tender for the financing and execution of Vilcele-Rm. Vilcea railway with the guarantee of the Government, but they can do it only with the guarantee of the company if its financial results satisfies them. There is an American company who wants to finance Deva-Arad railway. All these works that are financed with international funds are done through tenders.
Will the companies in CFR act as individual companies, economically independent?
From this point of view we have already aligned to the European Union directives and without being modest we are among the first countries in Europe who have applied the European directives in the railway field. The SN-CFR has been restructured and split into six companies. The National Company is called "of infrastructure" and it is a commercial company with 100% state capital - we have accomplished what the European directive required, i.e. to separate infrastructures from the operators.
The passengers company has been split again in February into 9 companies: long distance company (the intercity, rapid and express trains that link Bucharest with all large cities in the country) and 8 other regional companies that are in charge with regional passenger transportation.
The Freight Company and the SAAF which are in charge of the exceeding assets. After 1989 the transportation of goods decreased down to 27% from what it was before as a result of the economical decrease and changes in the economy. Passenger transportation has decreased down to 50%. Under these circumstances more than 80.000 freight wagons have been laid off and more than 1.000 locomotives which need to be turned in money. We have locomotives rented in Germany, Yugoslavia, Iran and Italy. SAAF it is a commercial company. With the money it gets this company is obliged to insure the modernization of the goods and passenger companies. A mix of local companies with foreign companies for the exploitation of the already existing wagons has already taken place. For example the foreign company comes with the cash, the wagons are rehabilitated and they exploit them together.
Then there is another company that deals with financial and juridical management. This company has been created in order not to multiply by five times the personnel and to control single handedly the situation of the entire railway activity. This whole restructuring process was only been done previously in England but through privatization - they have separated the infrastructure, have 25 passengers companies and 3 for goods. But England did not invest much lately and for example they do not have TGV. In France the policy is totally different and the state is more involved. However despite the fact that France is in the European Union they did not align to the European directives with the separation of the infrastructure from the operators - there is only one monopoly. We are not in the European Union but we have aligned ourselves.
The old SN-CFR has remained to carry on the debts it inherited.
Investments in infrastructures are very expensive and if the state is not involved it cannot be done. The private capital does not have any interest and it cannot do it alone either. We can be proud that we have not had any fatal accidents for twenty years, against speed and regularity. We prefer to go slowly but safely.
Freight and passengers companies have split again
in another five or six branches. We continue decentralization
hoping to get the decision closer to the production
place, identifying as exactly as possible the expenses
and identifying the possibilities to make incomes
grow. This way we plan to have an improvement of
efficiency and to offer a service as good as possible
for the passengers. The passenger activity is subsidized
but beyond this subvention the CFRs are commercial
companies that have to balance incomes with the
expenses. The Freight Company is the only one who
is independent from the financial point of view.
It is quite profitable and a study for its privatization
is on the way. Americans are very interested and
they also bought in England. |
MINISTRY OF TRANSPORTS