{"id":4520,"date":"2010-06-10T07:07:27","date_gmt":"2010-06-10T05:07:27","guid":{"rendered":"http:\/\/http:\/\/www.iliaspapageorgiadis.ro\/en\/?p=4520"},"modified":"2015-01-26T20:16:45","modified_gmt":"2015-01-26T18:16:45","slug":"2-urgently-start-building-by-ppppublic-private-partnerships","status":"publish","type":"post","link":"http:\/\/www.iliaspapageorgiadis.ro\/english\/2010\/06\/10\/2-urgently-start-building-by-ppppublic-private-partnerships\/","title":{"rendered":"2. Urgently start building highways by PPP(Public Private Partnerships)"},"content":{"rendered":"<p align=\"center\">\n\t<strong>Low Cost proposals to help Romanian economy exit the crisis:<\/strong>\n<\/p>\n<p style=\"text-align: justify\">\n\tRomanian economy has faced better times than nowadays. While the following period will be difficult for everyone (and especially the weakest ones of us), it is more than necessary to restart the &quot;economic engine&quot; that can move the country. Having this in mind, it is time to choose and implement some simple, low cost proposals in order to see things improving in the following months and the near future.<!--more-->\n<\/p>\n<p style=\"text-align: justify\">\n\t<strong>2. Urgently start building highways by PPP (Public Private Partnerships)<\/strong>\n<\/p>\n<p style=\"text-align: justify\">\n\t<strong>Today&#039;s facts<\/strong>\n<\/p>\n<p class=\"list\" style=\"text-align: justify\">\n\tPublic works are practically&#8230; stopped, due to 1.000 different reasons.\n<\/p>\n<ul style=\"text-align: justify\" type=\"disc\">\n<li class=\"list\">\n\t\tThe country has just few hundreds of kilometers of highways, while it needs many thousands. The same problem stands for railway investments, hospitals etc.\n\t<\/li>\n<li class=\"list\">\n\t\tIf the same situation continues during 2011 and 2012 (2010 is already lost), we will risk losing a big sum of European Grants, which were approved for this kind of projects. Plus we will lose the multiple positive effects that these investments would have had to the economy and the society in general.\n\t<\/li>\n<li class=\"list\">\n\t\tMost of the major projects, announced already since several years ago, are still &quot;under discussion&quot; or &quot;slow development&quot;.\n\t<\/li>\n<li class=\"list\">\n\t\tPoor infrastructure delays the country&#039;s recovery, prevents some of the new investments and &quot;costs&quot; a lot to the society, as it does not allow many new jobs to be created.\n\t<\/li>\n<li class=\"list\">\n\t\tRomanian legislation on the field of PPP is considered &quot;uncertain&quot; and several clear solutions need to be implemented.\n\t<\/li>\n<li class=\"list\">\n\t\tEveryone agrees that wherever the Romanian State gets involved, the result is always&#8230; &quot;higher costs and poor results&quot; (sounds like Greek to me&#8230;).\n\t<\/li>\n<li class=\"list\">\n\t\tConstruction was, is and will be the country&#039;s locomotive to growth. Its contraction by around 18% in the first quarter of the year caused the economy&#039;s decline by 2,6%.\n\t<\/li>\n<li class=\"list\">\n\t\tThere is an increasing number of Romanian citizens who are ready to pay an acceptable cost, in order to dramatically increase their life&#039;s quality.\n\t<\/li>\n<\/ul>\n<p style=\"text-align: justify\">\n\t<strong>Proposal: Adopt the European legal frame and immediately organize PPP projects, starting with national highways<\/strong>\n<\/p>\n<p style=\"text-align: justify\">\n\tInstead of moving slowly, losing opportunities and valuable time, we should accelerate and finish the necessary legal frame in few months, in order to speed up and proceed in multiple international tenders for PPP projects.\n<\/p>\n<ol style=\"text-align: justify\" type=\"1\">\n<li>\n\t\tWe can start with national highways.\n\t<\/li>\n<li>\n\t\tA realistic average target should be assignments of about 500 km \/ year (spread in several projects), starting with 2011.\n\t<\/li>\n<li>\n\t\tThe winner of the tender should have the right to be paid back by the tolls he will collect by the drivers of the new highway.\n\t<\/li>\n<\/ol>\n<p style=\"text-align: justify\">\n\t<strong>Proposed measures<\/strong>\n<\/p>\n<ol style=\"text-align: justify\" type=\"1\">\n<li>\n\t\t<strong>We should discuss with the banks, the bilateral chambers of commerce and the big consulting companies (starting with the &quot;big 4&quot;) which know today the necessary legal frame for such projects, as it is valid at European Union level. <\/strong>In few months time, especially if the State appoints this task to some top experts of the private sector, we can be ready to start with the first &quot;set&quot; of laws. **\n\t<\/li>\n<li>\n\t\t<strong>This new legal frame will allow to the Government to proceed in international tenders<\/strong>, being organized in a way that will allow to all serious international companies to participate in them.\n\t<\/li>\n<li>\n\t\t<strong>We should start with the projects where the studies and expropriation works have already been done. <\/strong>Then the projects close to maturity should follow, with the State focusing on creating a &quot;pipeline&quot; of projects.\n\t<\/li>\n<li>\n\t\t<strong>I would even find a solution in order for the State to receive a small amount of money per project, in order to finance with this the studies of the next project, <\/strong>we don&#039;t want to get blocked<strong>.<\/strong>\n\t<\/li>\n<li>\n\t\t&nbsp;\n\t<\/li>\n<li>\n\t\t<strong>The main incentive for the winner should be the toll fee he will receive, after he will have constructed the national highway. <\/strong>In some cases this could also be accompanied by some help by the State, guaranteeing the number of drivers passing by daily.\n\t<\/li>\n<li>\n\t\t<strong>There will also be some State&#039;s guarantees in this case, <\/strong>but nothing &quot;dramatic&quot; or too much.\n\t<\/li>\n<li>\n\t\t<strong>The winner of the tender will also be responsible for the excellent maintenance of the highway he had built.<\/strong>\n\t<\/li>\n<li>\n\t\t<strong>After a specified period of time and sum collected, the project will be delivered to the State.<\/strong>\n\t<\/li>\n<\/ol>\n<p style=\"text-align: justify\">\n\t(* I know that many people will tell me &quot;all these need years and years. No, this is not true. If someone wants to proceed with these projects, he can really finish in few months time, I have personal experience in some kind of projects like this, not in Romania. Ofcourse this can happen only if private top companies will get involved, in order to speed up comparing to the usually slower State)\n<\/p>\n<p style=\"text-align: justify\">\n\t<strong>Results<\/strong>\n<\/p>\n<ul style=\"text-align: justify\" type=\"disc\">\n<li>\n\t\t<strong>Real development will return in the country, providing thousands of new jobs to people.<\/strong>\n\t<\/li>\n<li class=\"list\">\n\t\tThe State&#039;s revenues will be boosted by the variety of taxes and costs that all these companies will pay.\n\t<\/li>\n<li class=\"list\">\n\t\tThe State&#039;s budget will remain &quot;untouched&quot;.\n\t<\/li>\n<li class=\"list\">\n\t\tThe country will start obtaining added value on the long run.\n\t<\/li>\n<li class=\"list\">\n<ul type=\"disc\">\n<li>\n\t\t\t\tEurope&#039;s top companies in this field will be initiated to enter in the market, win tenders and eventually deliver projects with &quot;European quality of construction&quot;.\n\t\t\t<\/li>\n<\/ul>\n<\/li>\n<li class=\"list\">\n\t\tAny area and city close to new highway will obtain higher price, as it will become more accessible.\n\t<\/li>\n<li class=\"list\">\n\t\tEvery area close to the new highway will have positive effects and especially in Western Romania. Public investments attract a multiple size of private investments and all these together boost the economy.\n\t<\/li>\n<\/ul>\n<ul style=\"text-align: justify\" type=\"disc\">\n<li class=\"list\">\n\t\tNegative point: People will have to pay tolls, probably high ones (comparing to what they are used to pay by now&#8230;. Nothing).\n\t<\/li>\n<li class=\"list\">\n\t\tBut isn&#039;t it better to drive safe in new roads and pay for this, than risking your life on old dangerous roads?<\/p>\n<ul type=\"disc\">\n<li>\n\t\t\t\tIndustrial Real Estate will be the first segment to benefit from the new reality.\n\t\t\t<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>\n\tPS. All these may NOT finish on time if they will not be treated as &quot;top priorities&quot;.\n<\/p>\n<p>\n\t* PPP, Public Private Partnership\n<\/p>\n<p>\n\tThe most effective way to join the forces of the State and the private sector, when the State is unable to finance itself very large investments. Hundreds of hospitals, schools, other public buildings and highways have been built following this method all around Europe. In case of highways, the drivers pay tolls, which are collected by the investor &#8211; private company. In case of hospitals etc, the State pays a &quot;rent&quot; (usually for 25 &#8211; 35 year) in order to avoid investing its own money and delay too much. <strong>The investors usually:<\/strong>\n<\/p>\n<ul type=\"disc\">\n<li class=\"list\">\n\t\t<strong>Move fast, as they want to start earning money fast.<\/strong>\n\t<\/li>\n<li class=\"list\">\n\t\t<strong>Deliver very good quality of work, as they know that they will be controlled and they will have to maintain what they built for a long period of time.<\/strong>\n\t<\/li>\n<li class=\"list\">\n\t\t<strong>Are able to attract financing by banks, creating in the end an interesting investment product.<\/strong>\n\t<\/li>\n<\/ul>\n<p>\n\tOf course you may tell me that it should be better for the State to do everything by itself. We all know that it can not, for various reasons. Just for your information, the wonderful airport you use when you travel to Athens and the excellent highway which connects this airport to Athens (it is called Attika road) are both constructed by PPP projects. This is why today they are among the jewels of Greek economy. From the moment they were built, they changed dramatically the values of properties, the people&#039;s habits, their lives!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Low Cost proposals to help Romanian economy exit the crisis: Romanian economy has faced better times than nowadays. While the following period will be difficult for everyone (and especially the weakest ones of us), it is more than necessary to restart the &quot;economic engine&quot; that can move the country. Having this in mind, it is [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":59454,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[216,17,204,236],"tags":[],"_links":{"self":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/4520"}],"collection":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/comments?post=4520"}],"version-history":[{"count":0,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/4520\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media\/59454"}],"wp:attachment":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media?parent=4520"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/categories?post=4520"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/tags?post=4520"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}