Romania’s infrastructure drive

Increased capital expenditure on infrastructure projects, particularly road and railway construction, led to Romania's civil engineering construction sector outperforming its residential and non-residential sectors last year.

According to a report from economic research company PMR, Romania's civil engineering sector increased nearly 16% in 2011, reaching a value of RON35 billion (€8.3 billion), while the residential and non-residential sector saw declines.

Road construction is leading the civil engineering market - apart from small decreases in 2009 and 2010, PMR said construction output in the sector had increased consistently over the past decade, reaching an estimated RON18.7 billion (€4.4 billion) in 2011. PMR analysts expect this rising trend to continue for at least two to three years, until 2015.

Indeed, as an EU member, Romania may obtain Cohesion funds of up to €4.6 billion to be spent on transport infrastructure from 2007 to 2013, according to the report.

As of the end of 2011, 434km of motorway with a value of €4.1 billion were under construction in Romania. PMR said about 200km of this would be completed this year, mostly segments on which work began two to three years ago, while contracts for a further 111km worth €1.1 billion are planned to be awarded in 2012.

The regulatory environment in Romania is also improving, according to PMR. A change in legislation in 2009, for instance, made land expropriation simpler and faster.

In addition, the Romanian Ministry of Transportation has invoked contracted clauses which stipulate penalties or contract terminations if contractors fail to meet deadlines, or attempt to change contract terms.

The update on Romania's construction sector comes after a report in February by another economic research company, Buildecon, which forecast Romania's civil engineering sector would exceed its pre-crisis level in 2012, and remain on a solid growth path in 2013 and 2014.