Romania Infrastructure Report Q3 2008

The outlook for Romanias infrastructure is positive, with major governmental and EU investment plans in the pipeline, which should encourage foreign investment into the sector. BMI predicts that the countrys GDP will rise from an estimated US$190.2bn in 2008 to US$297.8bn in 2012. The countrys population is expected to grow to 22.3mn over the same forecast period. These two factors will place a strain on Romanias current infrastructure and so upgrades will be required in the transport sector to facilitate the travel needs of both population and freight. The extra demand placed on the countrys power sector will mean that generating capacity will have to be increased and the electricity grid upgraded.

Recent developments within the countrys transport infrastructure include plans for a new airport to service business travellers and tourists to Romanias capital. Road projects throughout the country have been announced, with a highway planned for Transylvania and schemes to tackle congestion, especially in the countrys major cities, due to come online. Bridges are a major infrastructure requirement in the country as the Danube flows across the territory. In March 2008 the Romanian Ministry of Transport announced that 40% of the countrys railway and 60% of its bridges were overdue for repair. BMI believes that work will now be initiated in these sectors to upgrade and modernise.

Romania has a diversified power sector and its power generating capabilities will be able to meet domestic demand, with enough of a surplus for it to continue exporting electricity. The main power project, which is currently underway, is the construction of two new reactors at the countrys nuclear power facility, Cernovoda. Romania is diversifying away from developing thermal power facilities, which will lessen the countrys requirement for Russian gas, as well as helping it meet the new EU CO2 emissions requirements. The country also plans to develop its renewables sector with hydropower and wind power.

The countrys construction industry is set to be worth US$14.63bn in 2008 and this is expected to increase to US$25.68 by 2012. By the end of the forecast period Romanias construction sector is set to make up almost 9% of the countrys GDP. Construction will be spurred on by new residential projects and companies requiring new facilities as their operations expand. However, Romanias labour force deficit poses a major risk to the construction sector, andmight impact upon construction growth figures, as well as hampering the development of projects throughout the sphere of infrastructure. The labour force deficit was brought on by the countrys EU accession, which opened up new higher paying construction markets for Romanian workers. As a result, Romania has had to resort to hiring workers from China, Ukraine and Moldova.