Romania's PNRR highway projects face delays; state budget to cover shortfalls

Romania is struggling to meet the August 31 deadline for completing highway sections financed by the National Recovery and Resilience Plan (PNRR), with only 45.9 kilometers of the planned 132.4 kilometers expected to be finished on time. The remaining 86.5 kilometers are now slated for completion by the end of the year, according to authorities. The National Company for Road Infrastructure Administration (CNAIR) confirmed that PNRR funds will cover work completed up to August 31, while subsequent costs will be borne by the state budget.

Two of the three final road sections funded through the PNRR are unlikely to be completed by the August 31 cutoff for European funding. While a portion of the Adjud-Pașcani segment of the Moldova Highway (A7) is scheduled for inauguration on August 31 or September 1, according to CNAIR spokesperson Alin Șerbănescu, the Pașcani-Bacău segment of the A7 and a segment including tunnels between Margina and Holdea on the Bucharest-Nădlac Highway (A1) are anticipated to be finished by year-end. Representatives from Pro Infrastructura, an organization monitoring the works, consider this timeline optimistic and fear delays without the impetus of European funding.

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PNRR funding will be paid for what has been done by August 31. The rest, from the state budget.

The PNRR, approved by the European Council on October 28, 2021, aimed to support essential investments and reforms for sustainable recovery and to enhance the economic and social resilience of EU member states. Romania was set to receive a total of 28.5 billion euros, comprising 13.6 billion euros in grants and 14.9 billion euros in loans at a preferential interest rate. This contrasts sharply with current market borrowing rates, as Romania recently secured financing at 7.3% per year for 10-year state bonds.

The three remaining road infrastructure projects funded by the PNRR include two on the Moldova Highway (A7) and one on the Bucharest-Nădlac Highway (A1). The Adjud-Bacău segment of the A7, spanning 95.9 km and divided into three lots awarded in November 2022 to the UMB Spedition - SA&PE Construct SRL - Tehnostrade SRL consortium for 9.1 billion lei, is one of these projects. The funding deadline poses a significant challenge to the timely completion of these critical infrastructure developments.

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The implementation period of the project is from the date of signing the Financing Agreement (December 2022) until the date...