Romania Infrastructure Report Q4 2012
Business Monitor International, September 2012, Pages: 67
The Romania Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Romania's infrastructure industry.
BMI View: We anticipate that Romania's construction sector will continue to bounce back in 2012,
despite the headwinds generated by the intensifying sovereign debt crisis in the Eurozone. The economy as a whole is forecast to grow by 1% in real terms during 2012, according to our Country Risk team's latest macroeconomic outlook (updated at the end of July), but the construction sector should outstrip the predicted growth rate for the wider economy. Feeding into our relative optimism for the sector, activity in the local construction market expanded by 5.0% m-o-m in May 2012 (and 21.1% y-o-y). In the same month, the euro area saw construction sector growth of just 0.1% m-o-m. We forecast that Romania's construction market will expand by 5.7% in real terms in 2012 as a whole, an improvement from 3.1% in 2011 (and the 12.1% real contraction experienced in 2010).
Key developments over the last quarter include:
- In July 2012, the Economy Ministry announced that it had selected China's Huadian Engineering Co. to construct a new 500MW power plant. The project, Romania's first coal plant since the end of Communism in 1989 and estimated to cost EUR1bn, is to be built in partnership with Romania's state-owned CEN Rovinari. Huadian Engineering beat off competition from Japan's Marubeni, to secure a majority stake in the venture.
Italian renewable energy company Enel Green Power intends to inaugurate 202MW of wind power in Romania by 2016, reports Balkans (July 2012). The company's Romanian subsidiary, Enel Green Power Romania, has already inaugurated wind parks in the country with an overall capacity of 244MW. Enel Green Power also intends to develop hydroelectric power plants with an overall capacity of 25MW by 2016. In a boost to the construction sector, South Korean industrial conglomerate Hyosung is due to invest around US$150mn in building a factory in Romania, according to a statement by the Romanian Economy Ministry in late May. The factory will manufacture tire components and automotive airbags.
The statement was issued following a meeting between Romania's Delegate Minister for Business Environment, Lucian Isar, and the company's management board.
Railway operator Metrorex is to launch a tender for the construction of Romania's Line 6 metro route in September 2012, reported Railway Gazette International in late May. The 14km line will run between 1 Mai station and Otopeni, calling at Henri Coanda International Airport, and will include 12 stations. The EUR1bn (US$1.28bn) project will be financed by the Romanian government and a loan secured from the Japan International Cooperation Agency. Construction will take 60 months.
The strength and quality of Romania's political institutions falls short relative to much of Europe, with significant challenges ahead despite the progress made in the two decades since the fall of communism.
However, we believe that Romania's membership of the EU will spur gradual political development over the years ahead and is very supportive of long-term political stability.
We reiterate that the Romanian opposition Social Liberal Union (USL) is set to win November's parliamentary election. The current ruling coalition is unlikely to gain significant ground prior to the election, although small gains are possible. While we expect broad-based policy continuity after the election, risks to the USL's cohesion and its rocky relationship with President Traian Basescu will pose major challenges ahead.
BMI Industry View 5
Romania Infrastructure Industry SWOT 7
Market Overview 8
Competitive Landscape 8
Building Materials 9
Global 9
Europe 12
Table: Cement – Price/Volume % Variances (9m10/9m11) 15
Cement Forecasts 16
Table: Romania Cement Production and Consumption Data, 2009 – 2016 16
Table: Romania Cement Production and Consumption Long Term Forecast, 2014 – 2021 16
Industry Forecast Scenario 17
Table: Romania Construction And Infrastructure Industry Data, 2008 – 2016 17
Table: Romania Construction And Infrastructure Industry Long-Term Forecast, 2013 – 2021 18
Construction And Infrastructure Forecast Scenario 20
Transport Infrastructure 21
Table: Romania Transport Infrastructure Industry Data, 2008 – 2016 21
Table: Romania Transport Infrastructure Industry Long Term Forecast, 2013 -2021 23
Transport Infrastructure Outlook And Overview 25
Major Projects Table – Transport 27
Table: Major Projects – Transport 27
Energy And Utilities Infrastructure 30
Table: Romania Energy and Utilities Infrastructure Industry Data, 2008 – 2016 30
Table: Romania Energy and Utilities Infrastructure Industry Long-Term Forecast, 2013 – 2021 32
Energy And Utilities Infrastructure Outlook and Overview 34
Major Projects Table – Energy And Utilities 36
Table: Major Projects – Energy and Utilities 36
Residential/Non-Residential Construction And Social Infrastructure 39
Table: Romania Residential and Non-residential Building Industry Data, 2008 – 2013 39
Table: Romania Residential and Non-residential Building Industry Data Long-Term Forecast, 2013 – 2021 39
Residential/Non-Residential Building Outlook And Overview 40
Major Projects Table – Residential/Non-Residential Construction And Social Infrastructure 41
Table: Key Projects –Residential/Non-Residential Building Outlook And Overview 41
Risk/Reward Ratings 42
Romania’s Risk/Reward Ratings 42
Rewards 42
Risks 42
Regional Overview 43
Central and Eastern Europe Infrastructure Risk/Reward Ratings 43
Table: BMI's Central and Eastern Europe Risk/Reward Ratings 46
Company Monitor 47
Romania Infrastructure Report Q4 2012
© Business Monitor International Ltd
Page 4
Transelectrica 47
Strabag 48
Global Overview 50
Table: BMI Infrastructure Index – YTD Top Performers (%) 53
Table: BMI Infrastructure Index – YTD Worst Performers (%) 53
Methodology 54
Industry Forecasts 54
Construction Industry 55
Data Methodology 55
New Infrastructure Data Sub-sectors 55
Construction 56
Capital Investment 58
Construction Sector Employment 58
Infrastructure Risk/Reward Ratings 59
Table: Infrastructure Business Environment Indicators 60
Project Finance Ratings 61
Table: Design And Construction Phase 62
Table: Commissioning And Operating Phase – Commercial Construction 63
Table: Commissioning And Operating Phase – Energy And Utilities 64
Table: Commissioning And Operating Phase – Transport 65
Sources 66
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