2019 is the last chance for the use of European funds dedicated to large infrastructure. This is the reality in which we must start any discussion about funds, European projects and their destinations.
93% of Romanians are extremely dissatisfied with the condition of highways in the country, as shown by a study cited intensely at the middle of this year. It is what we all know and see in everyday life. This is what large scale investors demand. We are in last place in the EU for road quality. Nothing new so far. We have not taken advantage of funding from the EU for the last 12 years for a highway network. Still nothing new. What is new is that in the future we will not have access to funds and right now at a national level we are preparing to abandon, at least temporarily, plans to complete a highway infrastructure.
We are at the end of 2019, we have over 9 billion euros available for large infrastructure through the Large Infrastructure Program (POIM) and only 1.9 billion euros effectively absorbed so far. By contrast, important sections of the highway are in different phases of completion. Some are being executed, too few, alongside other major projects such as water and wastewater infrastructure, and district heating.
At this critical moment, the idea, lately conceived and promoted, to relocate 2 billion euros from the Large Infrastructure Operational Program to the Regional Operational Program is a serious concern.
Time and again we see considerable proof of political agenda spilling over into the disbursement of European funds based on specific interest groups. Let’s look to the Ponta government’s attempt to change the route of the European transport corridor to include the Bucharest – Brașov highway instead of the Sibiu – Pitești highway. Despite great effort on their part, the attempt failed, the Bucharest – Brașov highway in the end was not developed with European funds, but due to the drawn out debate the Sibiu – Pitești highway was delayed several years.
We appeal to Prime Minister Orban and the Deputy Prime Minister Turcan not to do what Ponta and Șova did.
We can find only one explanation for this desire to funnel money to the Regional Operational Program: the so-called regional development programs serve at the behest of the party elite at a county level. The title „so-called” applies because, in fact, the development regions are not functional and the budgets are negotiated by the heads of the counties. Let us not forget that, at this moment, the Regional Operational Program, already raided by Liviu Dragnea’s attempt to launch PNDL projects, has systematic absorption problems and a high risk of disengagement of funds.
Fortunately, the chances of achieving such a scheme are small. Moving 2 billion euros from the POIM to POR requires a very specific set of circumstances, due to the financing requirements of the two programs. There are different mechanisms and destinations between the funds at the European level that supply them: the Cohesion Fund and the European Regional Development Fund.
Technically speaking there are two ways in which money can be moved, depending on the fund from which the money is taken. For both, a number of consistent projects must be sacrificed or the funding needed to provide hundreds of millions of euros would have to come from the state budget. For example, the money that is still needed for transport projects not completed in 2007 – 2013 and moved to the current budget. In the case that the projects are not completed, Brussels must be reimbursed, for the period 2007-2013 as well. For example, the Sebeș-Turda highway, half of which has yet to be paid for. In addition, it would mean the cancellation of any contracts for new projects.
In the simple version, the Government would jeopardize financing for the modernization of district heating in several cities. And the biodiversity projects already contracted, and the whole axis dedicated to the energy infrastructure (which aims at balancing projects dealing with the national energy system and closed contracts: gas for Moldova – increasing pressure in our region and the possibility of supplying the Republic of Moldova – and wind energy transport from Dobrogea).
In scenario two, more technically complicated, the Romanian government could argue that everything previously agreed to as strategic investments for European interest is no longer a high priority and that it is more of a priority to move the money where it can be allocated at the county level. To be specific, the government must argue that the following are no longer priorities:
connecting Romanian cities and connecting Romania to the major networks of European highways and railways,
climate change projects,
the completion of the development of water and sewerage connection for rural communities. It may seem absurd, to think there are those of us in the country without access to running water and proper waste disposal, but it it true and we must ensure access to water for all Romanians. Theoretically, the Commission imposes huge fines for failure to meet this criteria, but it is lenient, the thinking being that no one could afford pay and costs could be recovered from the POIM.
No argument that highways, climate change, and water and sewer are not priorities would ever be taken seriously!
It’s not clear where the figure 2 billion came from, it seems like a nice, round sum or maybe someone just liked it. What is clear is that this figure would force the government to make some uncomfortable political decisions. For example, it could end European funding of district heating in Bucharest if the Firea administration remains unable to propose a project. In 2016, the second week of my ministry I sent an open letter to candidates City Hall imploring them to take on this project facilitated by European money specifically set aside for such a purpose. Years have gone by and the heating situation remains dismal. Maybe this brash town hall doesn’t need 180 million euros from the EU and we can make that money available for something else.
Politicians play with the numbers, we have worked out their thought process. We have chosen to approach the situation this way because we want the Orban government to make informed decisions and to state clearly and transparently what it is choosing to give up. The wisest course of action would be not to ruin the few good things that work in modernizing Romania with European funds.
Unfortunately, the timing of this move is horrible. Historical failures can have future implications. In the 2021 – 2027 European budget, we will hardly have enough money to finish the highways started in the current budget. Cohesion policy is changing, Europe is shifting its priorities.
60% of what we will receive in the future budget will go towards the area of innovation and green economy. We will have to cram everything else in the remaining 40%. The budget is still being discussed among the Parliament, the Council and the Commission and some adjustments can be made, and we are trying, but the trend is clear and will not change. The European Parliament is moving towards change and the above is the best case scenario for us. The Council is split between contributors and beneficiaries and unable to come up with a position, and the government and President Iohannis will have to decide whether Romania should make an issue of the budget.
We will argue here in Brussels on the percentages and how they are calculated, but in any scenario, innovation and the green economy will swallow a much larger share of future European money. Which means that for social, health, regional concerns, and highways there will be a much smaller pie to divide.
Let’s come back to the framework of the project “A Modern Country” and the changes brought about by the future cohesion policy.
Unfortunately, Romania is in competition with the rest of Europe. The highway infrastructure should have been developed during the 2007 – 2013 and 2014 – 2020 funding periods. It seems that we haven’t missed a single opportunity to miss an opportunity to build highways.
At the 11th hour, we implore the Orban Government- do not miss this last train, do not sacrifice the planned and already initiated projects in large infrastructure.