Romania's Constitutional Court (CCR) ruled on Wednesday that the law for transferring a 46-hectare land plot in northern Bucharest to the Romanian Chamber of Commerce and Industry (CCIR, a private entity) for the development of a real estate project with a private investor is constitutional.

The land, whose value is estimated at about EUR 300-400 mln, will host Romania's biggest real estate project, centered on the Romexpo exhibition center.

CCR rejected the notification filed by Save Romania Union (USR) and ethnic Hungarians' party UDMR against this law.

Eight of the nine CCR judges participated in the court hearing, and the decision was taken with five votes against three.

Among others, USR argued that a law granting state property to private entities with no proper compensation breaches the Constitution.

Meanwhile, CCIR argued that the EUR 2.9 billion that it will develop with local developer Iulius Group would generate EUR 345 million revenues to the state and 30,000 jobs, G4media.ro reported.

Visibly perplexed by the Constitutional Court's decision, the USR MPs asked president Klaus Iohannis to return the law to the parliament instead of promulgating it.

The European Commission (EC) has requested from the Romanian authorities information about the draft law that transfers 42 hectares of land in northern Bucharest from the state to the CCIR, sources familiar with the matter announced last November.

The bill was initiated by the Popular Movement Party (PMP) of former president Traian Basescu and supported by the main opposition party - Social Democratic Party (PSD), and by the ruling party - National Liberal Party (PNL).

The European Commission initiated investigations into the case in response to a petition filed by the South African real estate investor NEPI Rockcastle, which accuses that the normative act favors the Iulius group, controlled by local businessman Iulian Dascalu, the sources said.

In turn, the Iulius group claims that it participates in the project on a strictly commercial basis and is not deriving any benefit that would qualify as "state aid."

(Photo: Octav Ganea/ Inquam Photos)

iulian@romania-insider.com