Pioneering motorway concession deal collapses

The two billion Euro contract for the construction of the 55 kilometre mountain motorway between Comarnic and Brasov has collapsed at the request of French-Greek constructor Vinci-Aktor consortium

May 2010 - From the Print Edition

The consortium failed to obtain financing for the project, due to a breakdown in communication between the two firms and the Romanian Government.
Analysts argue the failure of Romania’s largest public-project partnership, signed last year, is a big step backward in the country’s development of its infrastructure.
Because this pioneering concession project has fallen apart, infrastructure firms may require tighter assurances from the Romanian Government before signing such large deals in the future, which is likely to drive up the cost of motorway construction in Romania.
Vinci-Aktor signed the 2009 deal to build and operate the Comarnic-Brasov motorway for 30 years.
“The contract had to be terminated because the contractual terms were not accepted by the Romanian state,” the Greek firm stated in a bourse filing. “As a result neither the project’s funding nor the implementation of the concession agreement was feasible.”
Analysts predict it will take another year to organise a new tender and choose a winner. But there is widespread scepticism about the project in the short-term, because this is the third time a deal for the Comarnic-Brasov motorway has collapsed.
Vinci-Aktor had started discussions with EU’s investment arm, the European Investment Bank (EIB) to fund the project – but these did not move forward.
However in March the EIB’s vice president Matthias Kollatz-Ahnen told The Diplomat that the EIB had “no limits” for lending to Romania this year. Erste Group’s head of infrastructure & public sector division Werner Weihs-Raabl also told The Diplomat that the bank is highly interested in investing over one billion Euro in Romania’s concession-based projects targeting road infrastructure.