PROJECT The national irrigation system, financed through bonds

The reconstruction of the national irrigation structure could be financed by issuing bonds and selling them to the population, sources in the sector say. The recent statements of Daniel Botănoiu, secretary of state in the Ministry of Agriculture and Rural Development (MADR), according to which the government is reviewing the possibility of amending the legislation in the agricultural sector in order to stimulate investments in irrigation, seem to corroborate these information in the market.

Mr. Botănoiu did not specify how the legislation in the sector would be changed. He only said that if the investments in irrigation would remain at their current level, then any strategy for developing the agricultural sector would fail.

The Minister of Agriculture, Daniel Constantin, recently said that he was talking to the European Commission about the accessing of an amount of 1 billion Euros in order to restore the irrigation infrastructure which existed 23 years ago.

The 1 billion Euros number was determined by the experts of the World Bank, as needed for the reconstruction and rebuilding of the irrigation system for approximately 800,000 hectares of a total arable surface of 9.3 million hectares. Currently, about 300,000 hectares are irrigated, compared to about 3 million in 1989.

Considering that the irrigation infrastructure needs massive investments to be rehabilitated, which the European funds would not be enough to fully cover, the authorities are also considering the issuing of bonds to attract domestic investments, our sources are saying. Thus, the farmers could form partnerships to invest in the modernization of the irrigation systems. The farmer associations could prepare a prospectus for investing in irrigation for the issuing of bonds with a specified maturity and a greater fixed interest rate than the interest paid by bank deposits. The bonds, to be sold to the population and to companies, would provide financial support to the farmers, who would repay the borrowed money from the increased harvest obtained using the irrigation.

• For now, the ANIF has yet to buy cheap energy from the free market

The effects of the latest measure to stimulate irrigation promoted by the MADR, namely the ANIF entering the energy market, by receiving the license of electricity provider, are not being felt yet.

Even though it has been authorized to buy energy from the profile market on the competent exchange from the beginning of the month of August, the ANIF has not yet registered for any call for tenders. Mr. Florinel Barbu, the managing director of ANIF, told us that for now, the associations of users of water for irrigations have contracted a quantity of energy which is sufficient and there is no demand: "We can't enter the market as an energy supplier straight away. We will buy energy when it's needed. Meanwhile we are trying to organize our activity on this segment".

However, sources from the ANIF told us that the norms and the regulations of the Agency as energy provider are not yet complete, which is the main reason why the ANIF has not begun buying energy on the OPCOM.

In the beginning of this month, the Minister of Agriculture was saying that the securing of the license by the ANIF would lead to a 30% drop in the costs of the water used for irrigation paid by the farmers. He also said that the surfaces for which the farmers have requested irrigation services from the ANIF have doubled since last year.

The representatives of the League of users of water for irrigations in Romania (LUAIR) told us that they are skeptical on the positive effects of the ANIF supplying energy. "Often times, the energy is more expensive on the free market than it is in the regulated system. It is very likely that the ANIF would sell energy at higher tariffs than the ones we have negotiated with the existing suppliers", said Aurel Mitea, the vice-president of the LUAIR.

The associations have never received an official notification about the possibility of buying energy from the ANIF. The only information they have available is the one published in the press. The main issues that the LUAIR is faced with are still the price of energy, the thefts of iron from the irrigation infrastructure which is unfinished as it is, the financing difficulties. The latter difficulties are cause by the lack of interest of the decision makers and implementers of the Ministry of Agriculture and Rural Development, farmers say.

Romania currently has an irrigation infrastructure for 700,000 hectares, but not even half of those are irrigated, because farmers consider those costs to be too high, the representatives of the LUAIR told us. The authorities claim that those costs are high due to the high consumption of energy of the irrigation installations, which are over 40 years old.

The head of the ANIF said that, currently, there are 56 ongoing projects of investing in the irrigation infrastructure.

Farmers claim that the ministry should help farmers to develop individual irrigation systems, which are more efficient, rather than wasting billions of Euros on mammoth irrigation systems.

• The ANIF audits reveal the bad management of the organizations of water users

According to the results of the audit decided by the Ministry of Agriculture and Rural Development, Daniel Constantin, the organizations of users of water for irrigation in the county of Timiş have not ensured the management, exploitation, maintenance and repairs of the irrigation infrastructure. According to the press release of the MADR, the results of the audit of the secondary network of the irrigation system and of the canals in the counties of Timiş and Ilfov show that the infrastructure of the irrigation and draining system has not been maintained in a state fit for its intended use, and is currently seriously degraded.

The same press release reveals that, following the audits made at ANIF Timiş, the organizations of Users of Water for Irrigation (OUAI) did not ensure the management, exploitation, maintenance and repairs of the irrigation infrastructure. Following the conducted audit, the General Audit and Anti-fraud Department will send a copy of the Audit Note to the ANIF, as well as to the Ministry of Development and Public Administration in order to review the documentation which was used as a justification for the buildings erected on the land improvement facilities of the counties of Timiş and Ilfov.