Only 35.5% of the more than 19 billion EUR assigned to Romania as cohesion and structural funds for the 2007-2013 period had actually been spent until 31 July 2014. In other words, in the seven and a half years since its EU accession, Romania only succeeded to absorb a third of the money allocated by the European Commission in order to reduce the differences between the new and the old member states.
Some might say the news is not so bad. In the end, the first years after the 2007 accession were lost due to the long and complicated processes of creating and licensing the management authorities for each operational programme. Or that the whole funding issue was after all a success, taking into account the institutions and companies submitted projects with a total value of 73 billion EUR, of which projects with a total value of 21.8 billion EUR (2.5 billion EUR more than the assigned funding for Romania) were approved, and the amount of the signed contracts is of 19.5 billion EUR (again more than the sum prepared by Brussels). The same optimistic people also pointed out there is still time to spend the available money until 31 December 2015 or that some programmes were allowed to breakdown the projects on technological phases, in order that at least some of the money allocated for a project to be absorbed in case it is not fully completed until the 2015 deadline.
Numbers don’t lie
For some, the glass is rather half empty. Beyond the lost years at the beginning of the 2007-2013 financial framework, they saw the latest statistics and they noticed a disturbing reality – between 31 December 2013 and 31 July 2014, the Romanian authorities only submitted to the European Commission reimbursement requests for 3% of the total funding. In other words, in the first seven months of this year Romania filed in expenditure statements for only 575 million EUR, thus the proportion of spent money increasing from 33.5% to 36.5% of the available amount. The worst results were reported in the Operational Programme Transport (POS Transport), where no reimbursement requests were submitted in January, February, March and May, while in April, June and July requests of only 75 million EUR were submitted (equal to 1.7% of the amount available for this programme).
“The European funding absorption rate after the first half of 2014 indicates we are facing a disastrous result for this year. Even if we have to spend almost three billion EUR from the EU funding by the end of the year in order to avoid losing them, halfway through the year we only asked for the reimbursement of half a billion euro”, the former Transportation Minister in the 2012 cabinet Alexandru Nazare said.
Romanian President Traian Basescu also said recently that he is very concerned about the EU funding absorption rhythm, which the current Social Democrat cabinet led by Victor Ponta “bragged so much about in the past years”. Basescu revealed the massive increment of the absorption rate in 2012 and 2013 was due to the payments made within contracts signed during the centre-right cabinet of his political ally Emil Boc. Which actually seems more and more plausible taking into account this year’s absorption rate sudden stop.
Not equally worried appears to be the Romanian Minister for European Funding, Eugen Teodorovici. On the contrary, he displays an elation not really supported by the reality. During a recent online discussion with the readers of euractiv.ro, the Minister was saying that, taking into account a 23% absorption rate for 2013, Romania might spend more than three quarters of the money assigned by the European Union. “With a minimum of 23% absorption rate for 2014 and 2015 we’ll get to spending almost 80% of the available funds”, he explained. The problem is that the results for 2014 are so far more than discouraging.
Teodorovici also believes there are programmes where Romania will succeed spending all the available money. “I’m reassured the Operational Programme ‘Increase of Economic Competitiveness’ will reach by the end of 2015 a 100% absorption rate. This is also true for the Operational Programme ‘Human Resources Development’. We will transfer all the unspent amounts of money to projects hat can be implemented in order not to lose a single cent”, the Minister said recently.
As for the potential catastrophe in the Transport sector, Teodorovici confessed during the same online discussion that his institution attempts an artifice. “In order to reduce the risk of losing the money allocated for this sector we are considering «retrospective projects» – those projects already financed from other sources (state’s budget, the European Investment Bank, the European Reconstruction and Development Bank etc.) that will be treated as EU-funded projects. The money already spent, as well as those who are about to be spent, will be reimbursed by the European Commission. This procedure was already applied in other member states”, he revealed.
Dreaming of speed
Beside the more and more worrying state of the European funds absorption rate, there is still a bright side – Romania succeeded to spend so far over six billion EUR, mostly for tangible projects. POS Transport, for example, disposes of 4.4 billion EUR for the 2007-2013 period and it financed extremely important projects for the national infrastructure. Two billion EUR were allocated from the EU funds for the A1 motorway which is planned to connect Bucharest with the European motorway network. The Orastie-Sibiu and Lugoj-Deva (segments 2 and 3, from Dumbrava to Ilia) will “swallow” almost one billion EUR. The rest of the money will go to the other sectors of the freeway between Sibiu and the Hungarian border (excepting for the already completed 33 km sector Deva-Orastie, which was also funded by EU, but through pre-accession funding).
Which is even more important is that almost 140 km of the motorway built with European support are already finished (once again, without counting the previously existing sectors), while another 44 km might be completed by the end of this year. The works on the 20 km stretch between Pecica and Arad and the 25 km between Timisoara and Lugoj are supposed to end in 2015, while the about 70 km sector between Dumbrava and Deva (the segments 2, 3 and 4 of the Lugoj-Deva sector) should be completed in 2016. After that, something that seemed almost unbelievable ten years ago will become reality – a complete full profile motorway between Sibiu and Vienna.
Even bigger amounts from European money were assigned to the reconstruction of the main railroad towards the Western Europe. 1.2 billion EUR from EU funding (broken-down in two separate projects) will be invested for the fully reconstruction of the Sighisoara-Simeria railroad in order to allow a maximum speed of 160 km/h. For the moment, the work progress varies between 1% and 57% on each of the five separate segments of the railroad.
Welcome to the 21st century!
An honourable amount (about 4.4 billion EUR) was assigned by the EU to environmental projects in Romania. With a sole exception (upgrading the Black Sea coast area in Constanta County), the biggest investments in this area were aiming expanding or upgrading the water and sewage systems or the wastewater treatment plants. Is not to be wondered taking into account that only about 12 million people in Romania (about 60% of the inhabitants) have access to public water networks. Those connected to a public sewage system are even fewer – 9.3 million. Romania is at the bottom of EU regarding the access to these two utilities.
Beside the top 10 projects, there is other EU funding (between 34 and 100 million EUR each) for upgrading and expanding the water and wastewater networks in 25 counties. The biggest amounts were assigned to Mures, Timis, Bacau, Maramures, Suceava, Teleorman and Galati projects.
The regional champions
Maybe not as impressive in terms of figures are the biggest projects funded by EU through the Regional Operational Programme (Regio). Excepting a few cases, most top investments consisted in upgrading works for various county roads. The most money was received by the number 223 county road in Constanta County (22 million EUR) and by the number 606 county road in Mehedinti County (21.9 million EUR).
Regio was assigned almost four billion EUR during the current financial framework and until 31 July 2014 it had received almost 10,000 submissions, with a total value of 14 billion EUR. Less than half of the proposals, with a value of 4.75 billion EUR, have been approved, and around 4,000 contracts with a total value of 4.3 billion EUR have been signed. Besides Regio has so far the best performances (excepting the much smaller Operational Programme for Administrative Capacity Development) in terms of submitted reimbursement requests (for 49% of the allocated funds) and already received money (46.7% of the total funds).
But one swallow doe not make a summer. In case the Romanian authorities won’t radically change their strategy regarding the EU funding, there is a significant risk the country will lose billions of the money the European Union offers for free.
billion EUR is the amount of EU funding assigned to Romania for the 2007-2013 period for seven different programmes. So far, only one third of the sum was spent
TOP 10 TRANSPORT
The motorways and the railroads going west received most of the money assigned by EU for the major transport infrastructure.
Project EU contribution (million EUR)
Reconstruction Sighisoara-Coslariu railroad 689
Reconstruction Coslariu-Simeria railroad 512
Orastie-Sibiu motorway 483
Lugoj-Deva motorway (segments 2 and 3) 483
Reconstruction Curtici-km 614 railroad 231
Nadlac-Arad motorway 202
Timisoara-Lugoj motorway 200
Lugoj-Deva motorway (segment1) 171
Timisoara-Arad motorway 118
Upgrading DN6 116
TOP 10 REGIO
The biggest projects funded by Brusseles through the Regional Operational Programme concerned the upgrading of some regional roads.
Project EU contribution (million EUR)
Upgrading DJ 223 Constanta 22
Upgrading DJ 606 Mehedinti 21.9
Upgrading DJ 151 Bistrita-Nasaud 20.5
Upgrading road infrastructure Piata Sudului Bucharest 19.3
Upgrading DJ 701 Teleorman 19.3
Upgrading Bd. Dorobantilor Braila 19.1
Upgrading DJ 582 Caras-Severin 17.9
Upgrading DJ 687D Hunedoara 17.4
Upgrading DJ 411 Giurgiu 17.3
Upgrading DJ 108A Salaj 17
TOP 10 ENVIRONMENT
Upgrading the water, sewage and wastewater treatment networks lead the top of the EU-funded environmental projects
Project EU contribution (million EUR)
Upgrading water and sewage network Cluj and Salaj counties 145
Upgrading water and sewage network Brasov County 145
Upgrading water and sewage network Constanta and Ialomita counties 144
Completing the Bucharest wastewater treatment plant 142
Upgrading water and sewage network Prahova County 116
Expanding and upgrading water and sewage network Dolj County 116
Upgrading the Black Sea coast area 112
Upgrading water and sewage network Dambovita County 107
Upgrading water and sewage network Arad County 106
Upgrading water and sewage network Iasi County 103
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