The national programme for the development of structures between Central Europe and Asia through Romania

Dan Capatana

Presidency of Romania, Advisor to the President

As early as three years ago, in the presidential institution, through the personal  implication of Mr. President Emil CONSTANTINESCU and through the Department for Regional and Interregional Development which I head, we have tried to develop large projects which will involve the participation of Romania to the development of the third millennium architecture of  transport.

For the selection of the corridors we started from the idea that Romania, through its geostrategic position, can consider itself as a pivot country among the developing markets from Central Asia, the Region of Caucasus, the Far East and Europe. It is certain that in the future decade the mineral resources available in the countries from Central Asia, especially hydrocarbons, will become a supply source for Europe and, at the same time, these countries will represent a market for industrial and agricultural products from Europe as well as from the south European area, of which Romania is a part.

The projects that we tried to promote in the last three years target the transport of hydrocarbons from the Caspian area to Europe as well as the transport of products, raw materials and persons.

We chose these corridors first of all because they are the object of some European Union projects to promote transport routes; (we speak about the TRASEKA and INOGATE programmes, TRASEKA for goods and persons transport, INOGATE for hydrocarbon transport); an additional reason, as I said earlier, was that, through Romania's geographical position, we could be an interested country for the development of these routes.

After we started these projects, we realised that is not just a corridor for goods transport and that the issue is more complicated; the construction of a pipeline, railway, highway, a bridge or a ferryboat line affects the development of the whole society in the countries involved.

Consequently, we extrapolated the term and we started to talk about economic corridors, about the relationship between the countries from Asia and Europe. Advancing on this way, we realised that we need a coherent, systematic and unitary approach on all the aspects related to the construction and operation of these corridors; what we need is an appropriate legislative framework, a policy for promoting trade and foreign relations between these countries. Slowly, we came to the conclusion on which my speech today is based, namely the necessity of the elaboration of a national programme for the development of the infrastructure between these countries and Europe.

The elaboration of this national programme was made by a governmental commision which I was appointed to lead and which consisted of representatives of all ministries involved in the development of such infrastructure.

The main goals ahead of us were: the completion and development of the existing legislative framework; listing all technical projects which will be developed within this programme, with all characteristics, both technical and economical and financial; developing and preparing the horizontal Romanian industry which may contribute to the construction and operation of these corridors; the development of related services and facilities; identifying financial resources; promoting a foreign relations and foreign trade policy in line with the proposed goals.

In relation to the first goal we envisage to adapt a series of existing laws, to propose new ones, where it is necessary to create regulating bodies in the field of gas, electric power and oil (some of them have already been set up) and also to develop and propose an adequate co-operation of Romania within the TRASEKA and INOGATE programmes.

I will briefly refer to every goal; for example for the improvement of the legislative framework we have in mind the laws regulating property, concession, land survey, which are very important for infrastructure projects.

The second goal is related to listing all technical projects on goods and passenger transport, hydrocarbon transport, electric power transport and information transport (telecommunications); because not all of these are related to the purpose of the today forum and because it is not my intention to make an exhaustive presentation of this subject, we will focus on just two of these projects, one related to goods and passenger transport and the other to hydrocarbon transport.

As far as goods and passenger transport is concerned, as you know, Romania is, at the moment, included in three corridors approved by the European Commission. And these are: corridor 4, crossing Romania from Arad to Constantza (with ramification to Thessaloniki or Istanbul), corridor 7 following the Danube River and ending at Constantza, and corridor 9 coming from Finland and the Russian Federation, through Ukraine, crossing Romania through Bucharest and Giurgiu and going south to Thessaloniki.

We have considered that Romania must first of all concentrate on the corridors coming from the Caspian Area, Central Asia and the Far East because trade with the Middle East can go on a shorter route through Istanbul and Tessaloniki.

The map shows the TRASEKA corridor and the junction Baku - Poti and further on by ferryboat to Constanta (you may know that a ferryboat line opened six months ago connecting Constantza with Poti); a transport route from Novorosirsk which will take over goods from Kazakhstan and the Russian Federation is also considered. The visit of the Romanian President to Kazakhstan was focused on this subject too; the Kazakhs have large resources of oil, gas and raw materials (precious metals mostly) and they are looking for a shorter transport route for their products.

We have proposed a new corridor connecting the Baltic Sea with the Black Sea, respectively Gdansk Harbour with Constantza Harbour. The discussions that we have had both within the Romania - Ukraine - Poland trilateral and those occasioned by the visit of the president in the Nordic countries make us believe that this would be a viable corridor, a straight line between Gdansk and Constantza viewed as two gates, one for the countries from northern Europe and the other for the countries from South-East Europe and Asia .

For this corridor, in Romania, a bridge over the Danube would have to be built in the Braila area; the bridge would also have a high local impact because it allows the extension of Braila and Galati towns on the other side of the Danube River (as you know the Galati-Braila area has the highest density of population in Romania; the towns are over populated and the land in the area is not so good). The said bridge would also lead to a more efficient transport of agricultural products from the Big Island of Braila to the Constantza port. At the national level, a bridge like that will make the connection between the North of Moldavia and Constantza and,at the international level, a needed connection between the Baltic Sea and the Black Sea.

Referring to the other project on hydrocarbon transport, I will present, shortly, the much talked about issue of the Constantza - Trieste pipeline. Based on studies made by American companies in co-operation with specialised Romanian companies, it was concluded that a possible efficient route of the Caspian oil could cross Romania by doubling the existing pipes from Constantza to Pitesti and Craiova, continuing to the west to Croatia and Trieste, intersecting the existing ADRIA pipeline network and connecting with the TALL network, which goes from Trieste to the south of Germany, Austria and the Czeck Republic .

The existence in the area of a pipeline network, both in Romania and in Central and South European countries, allows for the development of several scenarios depending on the future evolution of the markets. Function of the demand evolution, we may think about either a direct connection with Trieste, or a connection with the ADRIA network to the Croatian harbour Omishal where there is a very large, insufficiently utilised oil terminal.

What favours our project compared to other proposals of transporting oil from the Black Sea is, first of all, the fact that this would also be a supply pipeline; the existence of refining capacities in Romania, Croatia, Slovenia, Austria, Czeck Republic, Slovakia, Italy will determine a higher consumption of Caspian oil in this area. Moreover, besides the increased consumption of petroleum products, we also have in mind environment-related aspects, namely the processing of low sulphur Caspian oil rather than the oil from Urals (with a high sulphur content) which is used now in Central Europe (Hungary, Czeck Republic, a part of Germany).

The implementation of such a project involves significant environment issues. We have insisted in the studies on some important problems related to water quality and measures needed for the maintenance of the quality of drinking water and underground water, to air quality and noise, to flora and fauna, landscape and soil. We need to preserve the cultural patrimony all along the pipeline and to give due consideration to issues related to possible disasters (monitoring and prevention measures for oil leakage, fire, earth-quake).

I will not insist on corridors for gas transport; I will just make a short reference to a study undertaken by SHELL with whom we have signed a co-operation memorandum; the subject is the transport of natural gas from Turkmenistan either under the Caspian Sea to Baku or ,by a detour to the south, through Iran, then Turkey and further on to Europe; one of the alternatives obviously involves Bulgaria and Romania .

Another goal of the national programme is the horizontal development of economic sectors contributing to the achievement of the transport corridors; we envisage the restructuring of the building sector, the restructuring and privatisation of the chemical, petrochemical and refining sectors. Romania, at present, has a much higher refining and petrochemistry capacity than the present domestic consumption; through the increase and development of these sectors, we hope to export petroleum products to the Caspian region.

The fourth goal is related to improving services for a more efficient operation of the infrastructure; we refer to the development and modernisation of the banking and insurance system, the improvement of the stock exchange, customs, free zones operation, in general the promotion of modern trade instruments which could be attractive to foreign investors.

The fifth goal is the identification of financial resources. We consider both state budget funds and foreign investments or joint projects with international financial institutions.

The last goal is related to diplomatic and political actions promoting, through an adequate lobby, the Romanian projects and also to the development of commercial instruments and the conclusion of foreign trade agreements with all countries placed along these corridors, TRASEKA and INOGATE .

I want to tell you that this national program is not just a listing of ideas and wishes; every goal is followed by concrete measures to be taken and by extensive annexes ;every law has an annex showing what must be changed, which is the responsible Ministry or institution for the respective modification, what are the expected results, what is the schedule for the elaboration and Parliament approval of the legislative modifications. Similarly the technical projects are accompanied by detailed records stating the beneficiary, the present stage of the project, the available financial resources, the estimated economical effects and the practical approach for the progress of every project. Thus, it is a concrete programme approved by the Government under the form of a memorandum and I trust that it will be soon turned to reality.

The implementation of the above-mentioned programme will also mean the reconversion of manpower made redundant following restructuring and privatization in the economy; additionally, it would mean a more efficient utilization of available capacities in the refining, petrochemical and electricity generation sectors. We should think about the market opportunities in the surrounding countries and try to become a pivot in point of energy. We must have in mind the future closure of unsafe nuclear power plants in the Ukraine and Bulgaria, the present power demand in Greece and Turkey where domestic generation is not sufficient to meet the demand, we must consider what will happen with Yugoslavia in the following years. Thus, there are several areas of interest which make Romania a potential regional key-player.