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October 30, 2020
BUSINESS

Absorption of EU funds, unequivocal priority for the Ministry of Regional Development and Tourism

 


Interview with Cristian Petrescu, the Minister who speaks about the harsh lesson of the suspension of the reimbursements of structural funds and about the organisation of an international congress on spa and health tourism in Romania.

It is a known fact that the European Commission has decided to resume the reimbursement of eligible expenditure to project beneficiaries within Axis 2 projects for investment in regional and local transport infrastructure, which had been suspended in June 2011. How harsh was that lesson for the smooth development of the investing environment and what are the next steps, knowing that the rate of structural and cohesion funds absorption is quite low, unfortunately for Romania?

Romania is not doing very well in terms of the absorption of European funds, but we should not generalise. The ministry that I lead – and I have to say this very clearly – is a champion in the absorption and contracting of European funds. The Actual absorption rate – meaning the sums reimbursed by the European Commission – is 12 per cent, that is twice or even three times higher than the national one, if you want to make a comparison. The most important thing is, however, that the currently available European funds can effectively be spent up until 2015 and this is why I say that our number one priority is now to contract and start implementing projects so that, after all the money the European Union makes available has been spent, we can focus on the implementation of the investments and, by that, on absorption. We currently have at the ministry a European funds contracting rate of 85 per cent, which is very good. We work in stages, as we should. The important thing is for all that European money to come to Romania for the investment that we need so badly. And, since we are speaking of investment, the field absorption rate, which includes payments made by the Ministry of Regional Development and Tourism to project beneficiaries is much higher – 27 per cent –f the total available funds. You are asking me if we have learnt anything from the suspension of reimbursements under Axis 2 of the Regional Operational Programme. I hope we have, especially those who were responsible for the irregularities identified by the European Commission – the local public authorities, the project beneficiaries. The issues raised by the Commission were in connection with the way tendering procedures had taken place and we have hopefully learnt that we all should be more responsible when we deal with contracts involving European money in particular and public funds in general. I hope the beneficiaries have learnt their lesson, although they haven’t really suffered any direct consequences, for all due payments have been made by the ministry using a loan taken from the Treasury. The real burden has been on the shoulders of the ministry in its capacity as Management Authority, who had to take responsibility for other parties’ errors, perform checks, enforce corrections and convince the Commission to resume disbursements. In order to avoid having any more such situations in the future, we have amended the controlling system and organised training seminars for beneficiaries on the organisation of tendering procedures so that the unintended mistakes that have been made never happen again.

According to the draft Government Decision prepared by MDTR, the funds for the marketing and promotion activities amount to RON 11 M this year, RON 8.5 M in 2013 and RON 8.8 M in 2014 and 2015 respectively. Concretely, what will be the promotion measures that will be taken and how many Romanian and foreign tourists do you anticipate you can attract in that way in the next years?

We recorded a very important growth in tourism last year compared to the previous one, 17 per cent for Romanian tourists and 13 per cent for foreign visitors. Statistical data indicate we had the forth biggest rise in all Europe, after the three Baltic states – Estonia, Latvia and Lithuania – and a lot more than some of our direct competitors such as Bulgaria, which ranks 18th. There are destinations that had a spectacular growth last year. For example, the Danube Delta saw a 62 per cent rise in the number of foreign visitors. The same can be said about spa resorts, cities and even Bucharest. We will certainly keep the trend this year too, when we estimate a rough 15 per cent growth of the number of visitors. There are natural developments where investment is made and where sites benefit from strategic promotion. We will mainly focus on the promotion with European funds, through the Regional Operational Programme, and the directions are very clearly indicated by the Strategy for the national tourism brand, which is based on the market surveys performed by some of the most prominent research companies in the world, and this is something we know we need to do in the following years. Concretely, in 2012 we will participate in nearly 70 international travel fairs and exhibitions on all continents, which are the most important global events of the industry.We will continue to promote the national travel brand and Romania as a tourist destination by bringing foreign journalists over for international competitions such as Formula 2 races where Romanian pilot Mihai Marinescu competes, as well as through online and social media campaigns and advertising material. The national travel brand will also be this year a very important element helping promote Romania at all levels.

The strategic and operational marketing plan for the Romanian travel industry for the 2011-2015 period was presented a year ago. What are the objectives of the plan and which ones exactly have been fulfilled up until now?

Some of the things the marketing plan includes for the next period are the customisation and diversification of travel goods and services, development of six key-products each of them benefiting from their dedicated operational marketing plan in the future and the extension of the tourist season. We are in full process of implementation, which began last years. We have so far managed to implement the promotion campaign on foreign television channels CNN, Eurosport and Euronews, establish effective partnerships for promotion with airlines and not only, participate in the most important international travel fairs, prepare promotional material with the new visual identity and many other things. Romania’s tourist brand was very visible last year and will also be this year. Procedures have been initiated for several marketing and promotion activities which will be conducted starting with this year because, while we would like to be faster, as a public institution we have to comply with the law and rigorously follow all legal procedures.

Local infrastructure remains one of Romania’s problems, the MDRT review showing that this sector ended 2011 with just 480 kilometers of rehabilitated local and county roads. What are the projects for this year?

If we are to talk strictly about road infrastructure I have to start by saying that road construction and modernization is not the Ministry of Regional Development and Tourism’s direct responsibility, it’s the responsibility of a different ministry. Indeed, anything can come under the aegis of “regional development,” and we have tried to lend a hand in this case too. Yes, our ministry has rehabilitated 480 kilometers of county and local roads and we have hundreds more under rehabilitation. Not to mention the 10,000 kilometers of road included in the National Infrastructure Development Programme, or PNDI as it is known. We have already signed contracts for 14 counties and work can start there, we also have tenders already launched and, of course, road rehabilitations will follow in all the other counties because the programme covers the whole country.

What impact on tourism did the sightseeing buses inaugurated last summer in Bucharest have? How many foreign tourists have shown interest in this pilot-project until now? You have other plans to make Bucharest more attractive for foreign tourists. What are those plans?

It was a welcomed project that enjoyed success. It’s true, the initiative belonged to the MDRT but the Bucharest Public Transport Authority (RATB) handled the buses. Last year the buses were used by approximately 30,000 passengers, thus confirming our expectations and previsions. We want to continue this project this year too. Sightseeing buses have to exist in Bucharest, just as they do in all European capitals that promote themselves as tourism destinations. We, the MDRT, have launched this initiative, have promoted the national tourism brand, but the initiative should have belonged to local authorities, not to the ministry. That is what decentralization means, one should not wait for the government to come up with local initiatives. That is why, in what regards your question, plans to make Bucharest more attractive have to belong to local authorities, not the ministry. I say this because people have to understand it. We, as central authorities, should not be the ones coming up with plans to promote each locality. We have created a national tourism strategy, a wide umbrella through which Romania is promoted as a tourism destination. Basically, we are pointing out to tourists that Romania exists as an alternative for their holidays or city breaks. Where tourists choose to come, whether they choose Bucharest or Sibiu, a village in Bucovina or a mountain resort, has to do with the way in which each region or tourism destination promotes itself. I have explained to you what a ministry’s role is as a central authority. Now, returning to promoting the capital. We got involved here too; we could not have stayed impassible. Last year we launched the Tourism Marketing Plan for Bucharest, an instrument put at the disposal of local authorities. The plan was made by international specialists on the basis of market researches and it contains proposals, recommendations, even a slogan for Bucharest: “Europe is younger in Bucharest.” The plan’s most important recommendation refers to creating a tourism office for Bucharest, one that would play a central role in implementing the strategy, that would reunite all factors involved in the tourism industry and that would decide how Bucharest can be transformed into a top tier tourism capital.

 

What is the stage of the process of demolishing unauthorized hotels? What impact will this decision have vis-à-vis the number of tourists? At the same time, what does the state stand to gain from this process?

 

The principle is simple and does not concern hotels alone: everything built illegally, without the necessary permits or on the basis of illegally-issued permits, has to disappear. If respect for the law is the first argument, the second, also particularly important, has to do with coherence and common sense in what is being built. Buildings have appeared on the beach, close to the shoreline, buildings that have no respect for the areas’ architectural aspect or for national patrimony, buildings that endanger people’s lives to give just a few examples. Our campaign of applying the law will continue until all buildings on the seaside observe the law. Ever since 2010 we started to demolish illegal buildings at the seaside; we started off with cafes, beach-bars and clubs and this year it’s the turn of hotels. It is not an activity that gives us pleasure. Moreover, this action should not have been taken by the ministry, it should have been taken by local authorities that have to make sure that the law is respected on the territory they manage. That should have been done for the citizens’ interest. Since we noticed this interest did not really exist at local level, we had to intervene at central level, so we started to do the local authorities’ job. Maintaining proportions, just as we just talked about the sightseeing buses in Bucharest, an initiative that should have belonged to local authorities, so in this case local authorities should deal with the manner in which localities look and in which the law is respected in this sense. If other cases in which we can intervene are brought to our attention we will do it. It’s not about who gains and who loses, it’s about a state of necessary normalcy in the rule of law: you are not allowed to occupy the public space as you wish, without a construction permit, you are not allowed to destroy the environment, contempt for the state authority is not accepted. Tourism at the seaside has suffered enormously in recent years because of the way in which some resorts ended up looking. A serious cleanup has to take place on the Romanian seaside. We are doing it if nobody else does.

Spa tourism was – and will remain – a major attraction of Romanian tourism, because Romania has many assets with this regard, compared to other destinations abroad. How did the ministry get involved in promoting this product so far?

The Ministry of Regional Development and Tourism actually re-launched the debate on spa tourism, and returned it in the spotlight. We did this mainly because Romania has a huge tourist potential in this area of spa tourism and health services, plus spa tourism is one of the six products identified by the Strategy of the national tourist brand, following market researches, as products where our country can be competitive. Second, spa tourism services have the great advantage of being unrelated to the season of the year, or weather, as they can be provided 365 days a year. Third, the directive of the European Commission on cross-border medical assistance will come into force in 2013, and European citizens will benefit from the status of insurance beneficiaries in any country of the Union. In fact, if you are insured in a member state of the European Union, but receive medical assistance in another country of the community, the insurer will cover the cost of the medical services you receive. By re-launching the Romanian spa and health tourism, we got ready in time for this opening of services at European scale. We had arguments and did not have to seek them for too long, so the only thing left for us to do was start working. In other words, this is also a chance for the seaside, because we have important balneal resources there – Mangalia, Eforie and Techirghiol. This is how we can turn the seaside into not just a sun and beach type of tourist resource, as it is known, but also one that can be exploited all year round. Aside from the fact that it was conceived by a tourism-health inter-ministerial commission, the ministry’s strategy aimed at re-launching spa and health tourism also benefits from logistic and funding secured through regional development programmes. At present, jointly with the experts of the National Institute for Health Recovery, Physical Medicine and Balneoclimatology – controlled by the Health Ministry – we started to reevaluate the natural resources with therapeutic potential that exist in Romania, we identified the situation of balneal centers and trained personnel, which in some places is at European standards. Adding the tourist infrastructure – accommodation facilities, canteens and restaurants – as provided by the Tourism Law and the Balneal Law, at the request of local administrations last year we certified 10 resorts as spas. These are Baile Felix, Covasna, Sovata, Ocna Sibiului, Baile Olanesti, Calimanesti – Caciulata, Baile Herculane, Techirghiol, Amara, and Baile Govora. Of course, we will certify 10 more resorts soon. So far, we invested in several such zones. Borsec, Tusnad, Baile Herculane, Techirghiol, Sovata and Amara are just few examples. We got directly involved with investments, thus wishing to demonstrate that the tourist potential of balneal resources is not just something declarative and also to make private investors aware about it. We also set the objective of defining a complete and complex health tourism product, which will include balneal, antiaging, spa and naturist treatments. As for the promotion you mentioned, we made the first step yesterday, when we launched the ‘Guide of spas’ available in four languages – Romanian, English, German and Russian. The guide is aimed at specialists and physicians that prescribe treatments and cures. The next step, naturally, is a promotion brochure of spa tourism zones, for the general public. It is almost complete and will be published in six languages. We speak about promotion, the fact that there has been so much talk about spa tourism this year, and even the fact that you asked about it, is due to us, the people of the ministry, because we had the initiative of re-launching the spa tourism and promoted this idea. Now, almost each time someone speaks about the development of tourism in Romania, spa tourism is also mentioned. This is an example of successfully promoting an idea. And there is even more to it. Our efforts aimed at re-launching spa tourism in Romania have an international echo as well. The World Tourism Organisation, an agency of the United Nations, will organise jointly with the Ministry of Regional Development and Tourism, this autumn, in Romania, an international congress of spa and health tourism. These are important efforts we make, but we enjoy seeing that results become visible.


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