Romania

Siret Border Crossing	Second Roads Project.	Road opening ceremony

Romania is a major crossroad for international economic exchange in Europe. Due to insufficient investment, maintenance and repair, the transport infrastructure doesn't meet current needs of a market economy and lags behind Western Europe. These conditions are being improved through institutional strengthening, and further development of the transport infrastructure and its proper maintenance and rehabilitation.

The transport infrastructure, according to the Romanian Constitution, is public property of the state. Therefore, these assets are being administered by national or lower government entities, or companies, or corporations, under the jurisdiction of the Ministry of Transports, Constructions and Tourism (MTCT) or the Ministry of Administration and Interior who may award these assets for concession, in accordance with the provisions of the Romanian laws.

The Ministry through general directorates is in charge of setting up the general transport strategy and policy, defining the needs in terms of networks development, dealing with international organizations and organizing the transport operation through licensing of operators and setting up rules and regulations for the transport sector.

Roads and road transport. Romania’s total road network (116kb, MS Word) totals about 78,000 km. Public roads in Romania (excluding street networks) are classified in a three-tier system: national (main) roads (14,500 km), district roads (app. 36,000 km), and communal roads (app. 28,000 km). In addition there are approximately 30,000 km village roads serving the rural villages' needs, and farming related activities. The national roads are administered and managed by the National Company for Motorways and National Roads (RNCMNR) - an  entity under the Ministry of Transports, Constructions and Tourism. The district (county) roads are administered by the County Council and managed by the County's technical department. The communal roads are administered and managed by the village councils aided by the County council's technical office.

Road financing was arranged through a Road Fund, which received 45 % of the fuel excise tax and a vignette. This fuel excise tax income was shared between national (65 %) and county roads (35 %). The road fund income covered administrative expenses, routine maintenance, loan service payments, and limited rehabilitation costs of the national roads. It covered also, as main source of financing, parts of the costs of county roads' rehabilitation and maintenance, even though insufficient. Recently, the Government has issued a Policy Letter for the road sector. It includes, inter alia, a study to modernize Romanian road fund and road financing.

Over the past decade NAR has secured grants (EU-ISPA) and several loans from International Financial Institutions (the World Bank, EIB, EBRD) guaranteed by the state, to upgrade its main road corridors. The Government is actively pursuing new external IFI financing or Public-Private Partnerships to further upgrade the main roads and improve RNCMNR institutional capacity. RNCMNR's multi-year Highway Development Program and a multi-year Highway Rehabilitation Program are both primarily funded through loans and grants. The communal road network has recently begun receiving support from EU's SAPARD program and the World Bank's Rural Development Project.

Road transport is privatized and performed by numerous buses and trucks operated either by their owners or bus and trucking companies.

The issue of road safety has been moving inexorably up the policy agenda in Romania. As in the rest of the world, road accidents are responsible for many deaths and serious injuries each year. In an effort to curb this trend in Central and Eastern Europe, a strategic alliance has recently been formed between the Dutch programme Partners for Roads and the World Bank to jointly contribute to further the development and incorporation of safe road design and to facilitate the transfer of knowledge in Romania as well as in a number of other countries. (See Safe Road Design Manual)

Rail transport. The railway network in Romania comprised in 2004 22,298 km of track, of which 36% electrified and 27% double track. In 2003, the railways carried 8.1 billion passenger-km in addition to 17.3 billion ton-km of freight, and the combined total transportation by rail constituted around 45% of all passenger and freight movement in the country. In terms of size and scale of operations, railways are comparable with larger EU railways. However, as in other centrally planned economies, Romanian railways had very short lengths of haul, averaging only 250 km. Consequently, the railways experienced a dramatic fall in freight and passenger volumes from the peak volumes recorded in 1989 mainly due to the decline in GDP and competition from road transport. The rail share fell significantly from 80% for freight and 70% for passenger traffic in 1960, to less than 40% for freight, and to about 50% for passenger travel by 2001. Road transport competes aggressively with rail and has continued to gain in the share of the combined freight market (in terms of tonnage), and of the intercity passenger transport market (in terms of number of passengers). International trade is still important for the Romanian railways with imports accounting for 11% of the traffic, exports about 6%, and transit about 1%.

Railways incurred losses caused by decline in market share, overstaffing, outdated equipment, and historical non-payment by many loss-making state-owned enterprises (SOEs). The railways could not finance maintenance and investment in facilities and equipment. Railways covered the losses by accumulating arrears to the state and through debt to other creditors. As a result, the Government launched a railway reform program in 1996 – supported by World Bank, EBRD, EU-PHARE. The previous state railway company (SNCFR) was initially separated into five companies, subsequently merged into three: infrastructure (CFR), freight (Marfa), and passenger (Calatori), with the state as the sole shareholder in all three. The restructuring also created a regulatory agency (AFER) within MTCT, in addition to the Ministry’s railway department that coordinates the operations o f the railway companies.

The infrastructure company owns the track, buildings (stations and other buildings), depots, the majority of surplus assets (wagons and locomotives), and also owns and operates some other non-core activities such as hotels (however, non-core activities have been continuously reduced in the past years). CFR's main income source is the Track Access Charge (TAC) levied on all the operating companies. The passenger company provides extensive but uncompetitive passenger services at low tariffs. This is supported by the state through Public Service Contract (PSC). The freight railway company, Marfa, is managed commercially, receives no subsidies, and legally has the freedom to manage and set tariffs.

The three railway companies, CFR, Calatori and Marfa, own several subsidiaries which sell services for them and other purchasers. In the last years the MTCT has licensed a few private rail freight operators which share the use of the rail tracks and pay the TAC to CFR. The private operators now have 10-15% of the rail freight market. (See map of railway network)
Romania Railways has several sovereign guarantee loans (the World Bank, EBRD, EIB, JBIC) and grants (EU-ISPA) to improve the physical facilities, especially in the main corridors, the rolling stock, and organization and management of the railways. (See also Railway Renewal in Romania)

Maritime transport. In the maritime and inland waterways transport sector, similar principles have been adopted where State owned bodies or entities are in charge of the port infrastructure (quays, breakwaters, landfill, etc.) and award concessions to private bodies for port operations. The ports and navigation infrastructure are administered by the APM-SA Constanta National Company, CAN-SA Constanta National Company, APDF-SA Giurgiu National Company, APDM-SA Galati National Company, and AFDJ-SA Galati Autonomous Regie.

Air Transport. The national airline, TAROM, is fully state owned and there are no current prospects for its privatization. Air transport infrastructure (airports) is managed by “National Company” type entities for international airports, with the Ministry of Transports, Constructions and Tourism as the owner and the administrator. The other airports (serving only national air traffic) are organized as “Autonomous Regie”, which are local public companies.

Updated January 30, 2006

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