|
Upgrade of Romanian road network supported with EBRD financing
To further implement the national road rehabilitation programme begun in April 1993 and to support the commercialisation and privatisation of one of the key service sectors of the state-owned National Administration of Roads (NAR), the European Bank for Reconstruction and Development (EBRD) is extending a US$ 85.9 million (ECU 69 million) loan to the state of Romania.
"This forms part of an internationally funded programme developed over the past 18 months, implemented in close cooperation with the Romanian authorities," said Henry Russell, the EBRD's Resident Representative in Bucharest. "Due to the EBRD's specific private sector focus, we have focused on the institutional reform and privatisation component. Specifically, new regional operators with sole responsibility for road maintenance will be set up as corporate entities with the intention of being privatised in the future."
Over the next four years, periodic road maintenance will become completely separate from the NAR. Initially, individual regional authorities Antreprize de Reparatii si Lucrari (ARL), will be established, which will then be corporatised and privatised. This will affect about 35 per cent of the NAR's activities and workforce. One ARL already exists in the north-west city of Cluj, where the Antrepriza de Reparatii si Lucrari Cluj, currently still part of the NAR organisational structure, is responsible for all maintenance works in the region. For the loan to become effective, this ARL must be separated from the NAR and converted into a corporate entity.
In addition to its transition impact, the project will also have significant economic benefits, as part of the loan proceeds will be used to finance improvements to a 224 km road between Brasov and Turda, which is a priority Trans-European Network road segment and a major east-west connector route.
A number of environmental mitigation measures have also been included in the project including the planting of new trees and bushes for erosion control, protection of vulnerable ground and surface water using impermeable drains, noise barriers and emission controls on asphalt plants. A specific covenant of the loan also obligates the government to inform the Bank of measures to reduce the lead content of petrol sold within the territory of Romania.
The project is being co-financed by the European Investment Bank, which has already signed a ECU 70 million loan, and by the World Bank, which will sign a US$ 150 million (ECU 120 million) loan during the first quarter of 1997. The European Union's Phare programme may also co-finance the project, possibly under the 1997 programme for Romania.
The NAR is a state-owned but autonomous entity funded by the state budget and other revenue sources. It is responsible for the administration and management of the national road and bridge network. The recent approval of a Road Fund Law represents a significant step for increased cost recovery in the road sector.
In April 1993 the EBRD extended a US$ 80 million (ECU 64 million) loan to help Romania improve the condition of its national roads, with project completion expected by December 1997. In August 1996 additional financing was provided for a "twin-track" approach to upgrade the existing Bucharest-Pitesti motorway in preparation for a future contribution-in-kind to a private concession company.
|
