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Romanian highway to be upgraded with EBRD financing
To finance the upgrading of 96 kilometres of the Bucharest-Pitesti highway, the European Bank for Reconstruction and Development (EBRD) is extending a US$ 53.1 million (ECU 42.5 million) loan, backed with a sovereign guarantee from Romania, to the Romanian National Administration of Roads (NAR). As well as managing the upgrading to motorway standards, NAR will prepare and tender a concession to establish tolls and operate the Bucharest-Pitesti motorway, and to construct additional motorway sections.
"This 'twin-track' approach of upgrading the existing highway, in preparation for a future contribution-in-kind to a concession company, will make the motorway concession more attractive and financially viable," said Roy Knighton, Director of the EBRD's transport team. "The EBRD has been an active partner in developing Romania's transport system and worked for the past four years with NAR."
The Bucharest-Pitesti highway, built in the 1970s, lacks access controls and standard safety equipment. The upgrading will have significant economic benefits such as reducing vehicle operating costs due to road surface improvement, improved traffic safety, and increased speed and comfort generally associated with high motorway standards. By awarding a motorway concession, the government expects to mobilise private capital and ease pressure on the national budget.
Costs of the project total US$ 103.4 million, of which the EBRD is financing 51 per cent and NAR is contributing US$ 44 million. The future concessionaire will be expected to finance and build the toll plazas, and install the toll collection equipment and maintenance facilities. Part of the costs for preparing the concession tender will be financed by EC-PHARE.
The Bucharest-Pitesti motorway forms part of Corridor 4 of the Trans-European network, linking Romania with the EBRD-financed M5, M0 and M1-M15 motorways in Hungary. In April 1993, the EBRD extended a US$ 80 million loan to help Romania improve the condition of its national roads.
NAR is a state-owned but autonomous entity ("regie autonome") funded by the state budget and other revenue sources. It is responsible for the administration and management of the national road and bridge network.
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