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EC warns Romania about building motorways in Public-Private Partnership

The European Commission has sent an explanation about the risks coming from the Public Private Partnership, adding that the Government has never informed it about the intention to build A8, Targu Mures-Iasi motorway in such a partnership, not with European funds. The answer was sent to digi24.ro.

“We understand that the initiative to build motorways in Public Private Partnership comes from the National Committee for Strategy and Prognosis,” the EC officials say, according to the source.

The EC sends a warning in regard to using this kind of partnership.

“Although the European Commission supports the finding of alternative resources for the development of the road network, we recommend precaution before going ahead in launching the Public Private Partnership contracts. We refer to the European Court of Audit report regarding the PPP in Europe and the challenges that come from it,” the European Commission says.

According to digi24.ro, the conclusions of the European auditors regarding the PPP are:

  • The PPP are affected by generalized deficiencies and offer limited benefits. 12 contracts in Spain, Greece, France and Ireland have been analysed;
  • Inefficient expenses amounting to EUR 1.5 billion;
  • The costs/benefits ratio and transparency were undermined by the lack of clear strategies and policies and improper analyses;
  • Overall costs of EUR 9.6 billion (the EU contribution was of EUR 2.2 billion) – additional funds were needed to complete the projects;
  • Partner companies never lose, those who do are the tax-payers and the motorway fee payers;
  • Additional public funds of almost EUR 1.5 billion were needed to complete the five audited highways in Greece and Spain.

The European Commission further says that the PPP needs careful steps to avoid consequent demands or expensive renegotiations with possible consequences on public funds. The steps include feasibility studies, the cost-benefits analysis, traffic analysis, environment impact, financial sustainability, consequent maintenance. “Romania does not have much experience regarding the PPP, given that PPP lasts 20-30 years. The assistance from the European Investment Bank or the World Bank is recommended,” the EC warns.

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