The Government’s intention is to attract, by the end of the year, total investments of ‘minimum EUR 10 bn in energy, mineral resources, agriculture, industry and infrastructure, which will generate 50,000 new jobs, according to the National Investment and Jobs Plan released by PM Victor Ponta at the Government on Thursday. The Executive counts on re-launching foreign political and economic relations both in Europe and Asia.
‘The National Investment and Jobs Plan is in progress. The first phase was macro-economic consolidation. We have come out of the excessive deficit procedure and have kept the objective of reducing the deficit to less than 3 per cent of GDP in a difficult year. At the same time, we implemented social justice measures regarding public sector salaries and pensions. (…) We have come out of economic recession and, even if the growth was small, primarily because of the very bad agriculture results, this year everything is going according to the plan and actually slightly better than the original plan. We have political and economic stability in 2013. We have managed to unblock the operational programmes: Environment, Human Resources, Regional and Transport. Romania has been short-sighted with regard to foreign relations in the last years. It has not looked beyond its borders. This short-sightedness came at a huge cost’, PM Ponta said. According to the data presented by PM Ponta, Romania registered a 2.2 percent economic growth in the Q1 of this year.
More concretely, the Executive seeks higher energy independence, a more affordable energy bill, discovery of new resources and new projects at high environmental standards, rural development, investments for farmers and payments to agriculture operators. In what concerns the industry, the targets are a better competitiveness, development of industrial parks and assistance to SMEs.
The plan is also to develop road and rail infrastructure. Last year, the foreign direct investment in Romania decreased for a forth consecutive year to EUR 1.6 bn, dropping by 11 per cent compared to the EUR 1.8 bn in 2011. According to central bank data, the FDI in the first four months of the year amounted to EUR 322 M, almost 35 per cent less than in the similar period last year, when EUR 494 M was reported.
Major focus on agriculture
‘In 2013, via direct and complementary payments in Agriculture, Romania will introduce a total of EUR 2.8 bn EU funds on the market. The national programme for the restoration of the irrigation system – the minister has told me EUR 100 M has already been allocated for that. Fruit and vegetable collection platforms, family farm investments, mutual fund for the support of agriculture – actually around three billion euro, perhaps more, invested in agriculture this year. I repeat, with a good and sound thinking, (…), also helped by nature, this year agriculture will probably help exceed this prediction of 1.6 per cent annual growth’, said the prime minister.
Rosia Montana project and Chevron, generators of key-investment
On the list of projects set forth by the investment plan there is the gold mining operation at Rosia Montana but also the projects US Chevron company has in Romania. Negotiations for the Rosia Montana investment will be finalised by the beginning of the new Parliament season, in September, and the actual work will begin if the Parliament adopted the draft law the Government will table. Stalling amidst environmental consideration for years, the Rosia Montana project is included in the National Investment and Jobs Plan and presented as a project ‘with new environmental standards’ where the state will get 78 per cent of the profits. For this investment, the Government notes it is very determined to protect the local heritage. The Executive also plans to attract strategic investors at Cuprumin.
The Executive adds that, at the natural resources chapter, ‘the most important investment is the continuation of explorations in the Black Sea’. ‘We will further support the Chevron’s shale gas investments’, Ponta added. As far as Chevron is concerned, the plan is to explore new unconventional resources for increasing energy independence.
Among other investment projects mentioned in the same category there are the Rovinari thermal power station with a new 500 MW energy group, where China Huadian Engineering is going to provider an investment of about USD 1 bn, and a EUR 150 M gas-based station at Fantanele Mures coming from Marubeni in partnership with ELCEN.
Rompetrol case, political game
At the ‘energy independence’ chapter there is the memorandum with Rompetrol for redeeming the USD 200 M stock from the state, as well as the setting up of a EUR 1 bn investment fund. President Traian Basescu’s position in the matter of the Rompetrol is nothing but a political game, as he raised no objection when the Government sanctioned by law the agreement with KazMunaiGaz, Prime Minister Victor Ponta says, adding that, without the agreement, Rompetrol faces insolvency. He added that, given the Parliament recess, the president’s re-examination request was just wasting two months when the authorities could have negotiated with KazMunaiGaz the conditions for creating the EUR 1 bn investment fund.
The document also reminds that the Government plans to complete groups number 3 and 4 of the Cernavoda nuclear power station, as well as a EUR 1 bn investment at Tarnita – Lapusesti station. The document also mentions the plan to list minority stocks held by the state in Hidroelectrica and Electrica. ‘The Chinese can produce exactly the same technology that exists at the nuclear power station at Cernavoda, and the person who says the opposite is lagging behind’, PM Ponta noted after President Traian Basescu had said Romania and China use different technologies in the field and that the premier’s tour to Asia had been ‘catastrophic as image and effectiveness’.
At the same time, Prime Minister Victor Ponta also said yesterday that the new law regulating the royalties for all natural resources would be most likely adopted this year, and royalties would be brought in line with the European average. He noted that OMV Petrom would continue its almost EUR 1 bn investment in the development of new extraction projects.
At the industry chapter, the major international companies’ investments are mainly those of Dacia, Ford, Daimler and Oracle, for the expansion of current facilities. The Government counts on total investments of EUR 1.3 bn in industrial parks in 2013.
Regarding the infrastructure, the Executive reviews the plan for the concession of three motorways: Comarnic – Brasov, Pitesti – Craiova and the ring road. It is mentioned that motorway building segments worth a total of EUR 1 bn have already been awarded in tendering procedures and that rail infrastructure projects worth EUR 1.5 bn will be awarded soon.
The Executive announces a ‘debate with the entire political community on a consensual plan for the development of Romania in 2014-2018’ this autumn.