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Transport infrastructure in Romania needs EUR 70 billion – double as compared to existing resources

de Adrian N Ionescu , 25.6.2018

The investment needs in Romania’s transport infrastructure exceed EUR 70 billion, while the available resources by 2030 are EUR 36 billion, according to the Transport Master Plan.

Investments are out of step with the favourable period for private consumption, which rose by more than 10% in 2017, according to a study by Euler Hermes consulting firm, quoted by Agerpres.

Infrastructure remains a major impediment to the development of the sector and, to a larger extent, to the national economy (with only 800 km of motorway and another 60 km foreseen to be inaugurated in 2018),” says the study.

The infrastructure quality is one of the factors that placed Romania six positions lower in the WEF 2017 Global Competitiveness Index, only 68th out of 137 countries.

Besides the structural funds and the European Strategic Investment Fund, the use of public-private partnerships should provide a “better orientation” of projects to the concrete needs of the economy, says one of the study’s findings.

Transport market

Romanian carriers industry is estimated at EUR 5 – 6 billion, equivalent to 5% of the Gross Domestic Product (GDP).

The transport market is dominated by road transport and related industries, with more than 90% of the transports carried out.

More than 35,000 companies and PFAs operating over 180,000 vehicles, employing about 360,000 professional drivers, but less than 100 companies have more than 100 trucks.

The development of the sector is given by the integrated services of:

  • warehousing and transport (serving the continuously expanding modern retail),
  • courier services (due to the electronic commerce, the courier market increased to over EUR 400 million in 2017) and
  • transportation of car parts and sub-assemblies (in line with the accelerated development of the automotive industry).

Romanian carriers are still competitive in terms of prices compared to the markets in Western Europe

However, Romanian carriers’ advantage is eroding due to cost increases (related to RCA policies and national minimum wage) and the enforcement of the European regulations (mandatory rest time and rules on employee posting).

In addition, the economic growth also brings a shortage of skilled workforce, which limits development opportunities due to reduced investment in automation and IT systems in the field (still seen as unnecessary and too costly).

Euler Hermes is a subsidiary of Allianz, rated AA by Standard & Poor’s, which provides its clients with business-to-business (B2B) financial advisory services that support the management of trade receivables and the liquidity.

The company is present in over 50 countries with 6,050 employees and had a consolidated turnover of EUR 2.6 billion in 2017 and assisted business transactions with a global exposure of EUR 894 billion, at the end of last year.

The study summarizes the data available at the National Institute of Statistics, the National Union of Road Hauliers from Romania, the 2017-2018 World Economic Forum Global Competitiveness Index, 2018 Major Companies in Romania report by ZF & Deloitte and Euler Hermes’ Payment Methods study – Euler Hermes Economic Research”.

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