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Deputies adopted draft law for the construction of a motorway between Targu Mures and Iasi

The Chamber of Deputies, as the decisional chamber, adopted Wendsday the draft law approving the Iasi-Targu-Mures “Union” motorway, with 261 votes in favour of the bill. According to the project, initiated by MPs of the Popular Movement Party and signed by representatives of all political parties, the Unirii Motorway starts at Romania’s border with the Republic of Moldova through a new bridge over the Prut River and ends with a connection to the A3 Brasov – Bors motorway, close to Targu Mures.

The motorway will be financed from the state budget, through the Ministry of Transport, from external loans, non-reimbursable European funds and/or through a public-private partnership. The law stipulates that the procedures for the 320 km motorway are to start within 30 days of its promulgation.

In each annual budget law, during the implementation of the project, the motorway will receive budget appropriations according to the funding required by the Ministry of Transport. The Ministry is also responsible for coordinating the construction of the Union Motorway and will start the procedures required for this investment objective within 30 days of the law’s entry into force.

According to the USR MP Catalin Drula, there will be significant consequences after the law is passed. Within 30 days, public procurement procedures for this investment project must be started. Then, every annual state budget law will have to provide precisely the budget appropriations requested by the Ministry of Transport for this project or explicitly derogate from the motorway law; third, the geographical boundaries are clearly defined from the border with the Republic of Moldova with a new bridge over the Prut to the connection with the Transylvania Motorway near Targu-Mures; and fourth, subordinating the project to the Prognosis Commission under the responsibility of PM Viorica Dancila ends – the draft explicitly states that the Ministry of Transport will manage the motorway.

Prior to this vote, the European Commission has sent an explanation about the risks coming from the Public Private Partnership, adding that the Government has never informed it about the intention to build A8, Targu Mures-Iasi motorway in such a partnership, not with European funds. The answer was sent to digi24.ro.

“We understand that the initiative to build motorways in Public Private Partnership comes from the National Committee for Strategy and Prognosis,” the EC officials say, according to the source.

The EC sends a warning in regard to using this kind of partnership.

“Although the European Commission supports the finding of alternative resources for the development of the road network, we recommend precaution before going ahead in launching the Public Private Partnership contracts. We refer to the European Court of Audit report regarding the PPP in Europe and the challenges that come from it,” the European Commission says.

According to digi24.ro, the conclusions of the European auditors regarding the PPP are:

  • The PPP are affected by generalized deficiencies and offer limited benefits. 12 contracts in Spain, Greece, France and Ireland have been analysed;

  • Inefficient expenses amounting to EUR 1.5 billion;

  • The costs/benefits ratio and transparency were undermined by the lack of clear strategies and policies and improper analyses;

  • Overall costs of EUR 9.6 billion (the EU contribution was of EUR 2.2 billion) – additional funds were needed to complete the projects;

  • Partner companies never lose, those who do are the tax-payers and the motorway fee payers;

  • Additional public funds of almost EUR 1.5 billion were needed to complete the five audited highways in Greece and Spain.

The European Commission further says that the PPP needs careful steps to avoid consequent demands or expensive renegotiations with possible consequences on public funds. The steps include feasibility studies, the cost-benefits analysis, traffic analysis, environment impact, financial sustainability, consequent maintenance. “Romania does not have much experience regarding the PPP, given that PPP lasts 20-30 years. The assistance from the European Investment Bank or the World Bank is recommended,” the EC warns.