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€60 million boost to Romanian road sector restructuring
EBRD invests in construction of the Pitesti bypass
Construction of a bypass around the Romanian city of Pitesti, essential to completing an important pan-European roadway, has received the support of a €60 million loan from the European Bank for Reconstruction and Development. The EBRD is providing the sovereign-guaranteed loan to Romania's state-run road company National Administration of Roads (NAR). The investment calls on NAR to strengthen its management along more commercial lines and also provides incentives for the Romanian Government to reform the road sector to facilitate future investment.
The Pitesti Bypass connects Pan European Corridor IV, running from Central Europe to the Black Sea port of Constanta. The European Commission has highlighted it as an important trans-European road link.
Salvatore Candido, the EBRD's Director for Romania, said the investment should help ease pollution by reducing the amount of heavy traffic that crosses the centre of Pitesti, as well as stimulate the economy by removing a bottleneck in this important transport corridor. Romania has many roads that require a great deal of funding, Mr Candido said, and the sector could make better use and attract more resources if institutional reform in the road sector were carried out.
The EBRD project requires reforms from the Romanian Government in three areas: new tariffs that takes into account the opinions of road users themselves, as well as development of a strategy for public-private partnerships; increased commercialisation, including development of performance-based road maintenance contracts; and institutional and regulatory reforms, including publication and implementation of a sector policy.
The EBRD has invested over €240 million in the Romanian road sector. That includes the Pitesti-to-Bucharest Motorway and the Pitesti-to-Bors national road. The Pitesti Bypass has been highlighted by the Stability Pact for Southeastern Europe as an important contribution to regional integration. EU-PHARE provided funds for project preparation, and for the associated technical cooperation.
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