Romania’s new Government plans to cancel the procedures for starting public-private partnership (PPP) contracts for infrastructure projects such as the Targu-Neamt - Iasi and Comarnic - Brasov highways, according to a proposal submitted on January 16 by the head of the prime minister’s office, Ionel Danca.

The procedures for such contracts were initiated by the previous Social Democratic Government and were coordinated by the national forecasting and strategy commission - CNSP.

"We are talking about Vâlcov-type schemas," Danca said pointing to the former adviser to prime minister Viorica Dancila, Darius Valcov, who came up with the idea of such contracts.

The Comarnic-Brasov section is the most difficult part of the Bucharest-Brasov highway, the first high-speed road connection between the southern and central parts of the country.

The project should be developed either under a public private partnership project managed by a credible independent bank, or on its own by the Government with money from the public budget, the new prime minister Ludovic Orban stated in early December.

He estimated the project at some EUR 20 million per km for the 60-km section (EUR 1.2 bln in total), resulting in EUR 400-450 mln per year to be financed from the state budget over a three-year period, a cost that the PM believes “the Government can afford”.

The Târgu Neamţ - Iaşi highway (68 km) is part of a bigger project aimed to connect Transylvania and Moldova regions, namely the Targu Mures - Iasi highway.

CNSP published last May the invitation to interested partners for the construction of the motorway under a public-private partnership (PPP). The cost for constructing the highway is estimated at EUR 1 billion, and the works should be completed within four years. The PPP contract is designed to stretch over 30 years. The Government estimates it will have to pay up to EUR 61 million per year to the construction company to make the investment feasible.

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editor@romania-insider.com