"A.T. KEARNEY" STUDY: Romania"s road infrastructure needs 130 years to reach levels similar to those of Western Europe

Cosmina Capalău

Romania"s road infrastructure could reach European levels in about 130 years, provided the current pace of development remains constant, according to the specialists of consulting company "A.T. Kearney".

With an annual investment growth rate of 30% for infrastructure by 2012, Romania has the most dynamic market in the region, followed by Russia and Slovakia, where the investments are expected to grow by 25% a year, and 20% a year, respectively.

"With an average road density of 0.34 km for each territorial square kilometer, which is less than four times the ration of Central European Countries and 14 times less than the values of developed countries, Romania is extremely attractive for investors in this sector", according to Iulian Cîrciumaru, consultant for "A.T. Kearney" and author of the study.

The attractiveness of the local market is caused mostly by the fact that the Romanian government has allocated over EUR 10 billion for infrastructure investments in 2009, and the European Union will avail another EUR 4.3 billion, which can be accessed through development projects.

However, Iulian Cîrciumaru said that "even though the Romanian market will grow by 30% a year until 2012, whereas Poland"s growth will only be 11%, the funds allocated by Poland for developing the infrastructure, were 4,5 times larger than Romania"s.

The difference between Romania and the more developed countries is even greater, both when it comes to allocated funds, and to the existing infrastructure. Given these circumstances, even if the current growth rate of 30% a year were to remain constant, Romania would need 130-150 years to reach the standards of Western European Countries when it comes to road infrastructure", "A.T. Kearney""s consultant said.

Romania, deficient in attracting European funding and foreign investors Mr. Cîrciumaru claims that Romanian authorities failed to elaborate or implement attractive projects, and that there are no notable accomplishments when it comes to shadow toll partnerships, either. He feels that "in mature markets like Great Britain or France, this type of partnerships are a standard when it comes to funding projects, but they are almost non-existent in Romania".

"In the context of the economic crisis, all countries are struggling to do better at being competitive and attracting foreign investors. Romania will only become attractive for foreign investors by investing heavily in infrastructure. What"s more, the infrastructure needs to be homogeneously developed all across Romania. Otherwise, resources found in Bucharest and in a few other countries, which attract the largest funds, will be overvalued, which will cause investors to look for opportunities elsewhere", concluded Mr. Michael Wiess, vice president of "A.T. Kearney".