Infrastructure and PPP

Government strategy regarding the development of broadband electronic communications in Romania for the period 2009 – 2015

With a view to support the development of broadband electronic communications, as a cornerstone in the creation of an “information society for everybody”, the Romanian Government adopted the Strategy Regarding the Development of Broadband Electronic Communications in Romania for the period 2009 – 2015 (the “Broadband Strategy”).

1. Main objectives

The main objectives of the Broadband Strategy include: ensuring and increasing the access rate to broadband services; increasing the broadband connection penetration rate in underserviced areas where there is little or no access to broadband services, as well as at household level from the current 27.04% up to 40% by 2010 and up to 80% by 2015 and at the population level from the current 10.25% up to 100% by 2015; stimulating the demand for and offer of broadband electronic communication services in both public and private sectors; enhancing accessibility to services; connecting and increasing the usage rate of broadband services by public institutions and SMEs, etc.

Furthermore, connecting the 30% Romanian population living in rural areas to high-speed Internet services is one of the top priorities in the implementation of the broadband universal service by 2010.

2. Financing

It is expected that the costs associated with the implementation of the Broadband Strategy period 2009 – 2015 shall amount to approximately EUR 1.25 billion, of which EUR 140 million shall be extended by the Romanian Government as co-financing in conjunction with the European funds which shall be made available for the project.It is envisaged that the overall financing needs be secured by: (i) maximizing absorption of national and/or European funds available for the IT sector; (ii) accessing public grants for the acquisition of equipment; (iii) accessing the funds available for “universal service”, pursuant to the qualification of broadband services as component of the “universal services” concept; and (iv) entering into public-private partnerships with investors interested in co-financing projects regarding the implementation of broadband networks and services.

3. Implementation

The implementation of the Broadband Strategy shall be carried out by a working group, the responsibilities of which include: determination of primary objectives and lines of action in the development of the information society in Romania, monitoring the implementation of the broadband services and infrastructure related projects, the adoption of an action plan for the modernization of the central public administration. The working group shall include representatives of the Ministry of Communication and Information Society, the Ministry of Education, Research and Innovation, the Ministry of Administration and Interior, the Ministry of Public Finance, the Ministry of Economy, the Ministry of SMEs, Trade and Business Environment, the Ministry of Transportation and Infrastructure, the Ministry of Regional Development and Housing and the Ministry of Public Health and shall act as a liaison among different institutions and authorities interested in this kind of projects.

Repealing of legislation on the mandatory use of FIDIC contractual framework to public works concession contracts

The joint Order no. 915/465/415/2008 issued by the ministry of economy and finance, the ministry of transportations and the ministry of development, public works and housing for the approval of the general and special contractual conditions for the conclusion of works contracts which fall within the scope of application of the Government Emergency Ordinance no. 34/2006 regarding the award of public procurement contracts, public works concession contracts and services contracts (“GEO no. 34/2006”) has been repealed by a new piece of secondary legislation entered into force at the end of May 2009.

Consequently, contracting authorities are no longer required to make use of the general and special contractual conditions as provided under the annexes of the Order 915/2008 when concluding public works agreements falling under the incidence of GEO 34/2006 (e.g., conditions for works contracts, special mandatory conditions for construction works contracts, contractual conditions for equipments and constructions including design – FIDIC 1999, special mandatory conditions for Yellow FIDIC 1999, general conditions of the agreement on settlement of disputes, conditions regarding procedure and general and special conditions for short form contract).

Administrative clarifications

Building permit for road infrastructure of national interest

Given the existence of legal provisions comprised in distinct enactments which, apparently, are contradictory, but nevertheless relevant for the permitting of transpport infrastructure, on April 8, 2009, the law firm Nestor Nestor Diculescu Kingston Petersen has extended an official request letter to the Ministry of Transportation and Infrastructure for clarifications in respect of the need and the procedure for issuance of building permits for the road infrastructure of national interest.In response, the Ministry of Transportation and Infrastructure has sent an official opinion confirming the interpretation according to which, although the Law no. 198/2004 regarding certain measures preliminary to construction of roads of national, county and local roads has for a short while regulated an exemption from the obligation to apply for and obtain a building permit for the construction of road infrastructure of national interest, the latest amendments to the general legislation on the authorization of construction works have reinstated it. However, by derogation from the generally applicable rules, the building permitting process is entrusted to the Ministry of Transportation and Infrastructure – The General Department for Road Infrastructure and Concessions.

The current legal framework applicable to construction works for infrastructure of national interest does not contain detailed provisions regarding the procedure for authorization thereof; pursuant to provisions of the implementation rules pertaining to Law no. 198/2004, a special order should be issued by the ministry of transportation and infrastructure for approval of this procedure.According to the Article 269 of the Fiscal Code, the issuance of the building permit for road infrastructure of national interest is exempted from the payment of the legal charges.

European Jurisprudence

Impact of the Regulations Concerning Nature 2000 on Infrastructure Projects

On 23 April 2009, the Court of Justice of the European Communities (the “ECJ”) has ruled a judgment in appeal (Case C-362/06 Sahlstedt and Others v. Commission) with regard to the annulment of a decision (the “Contested Decision”) adopted by the European Commission (the “Commission”) comprising a list of Sites of Community Importance which fall within the scope of Nature 2000 network (i.e., Commission Decision 2005/101/EC).

In brief, the applicants claimed that the Contested Decision, pursuant to which their real estate properties were declared Sites of Community Importance, had been passed without observing the relevant procedure on the choice of sites for the Natura 2000 network, in violation of the Community law, particularly of the provisions of the Council Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora.

The ECJ upheld the judgement of the first instance court, confirming that, since the Contested Decision contained no provision regarding the system for protecting Sites of Community Importance, it did not and could not affect the landowners’ rights and obligations or impose any obligation whatsoever on economic operators or private persons (Case T-150/05). On this ground, the claim was dismissed.

We will not comment further than to note that the inclusion of a site on the list of Sites of Community Importance pertaining to the Nature 2000 network may often entail a change in the regime thereof, particularly from an economic perspective. Once a real property is qualified as a Site of Community Importance, it may become subject to certain restrictions deriving either directly from the law or defined pursuant to subsequent administrative acts which may limit the ability of either the relevant authorities or of the private owner to use it for the purposes of infrastructure projects.”

Other ECJ decisions are expected to be rendered on cases currently pending before the ECJ, which should bring further clarifications on the Community legal framework regarding the Nature 2000 program. These decisions may have a significant impact upon infrastructure projects, since addressing matters such as:

• failure of a Member State to comply with the Directive 92/43/EEC procedures, concerning the assessment of the implications that certain projects may have on the sites regulated by such directive, in the context of a project of widening and/or upgrading of a motorway (Case C-560/08 Commission v Kingdom of Spain);
• failure of a Member State to adopt preservation measures, according to the Directive 92/43/EEC, in order to prevent the deterioration of natural habitats and the habitats of species, due to the construction of a tourist complex (Case C-491/08 Commission v Italian Republic);
• failure of a Member State to ensure that the incidental capture and killing of certain animal species provided by Directive 92/43/EEC do not have a significant negative impact on the species concerned, in the context of a project regarding the improvement of a rural road (Case C-308/08 Commission v Kingdom of Spain);
• clarification of the reasons which may be invoked by a EU member state for refusing the inclusion of certain sites in the Commission’s draft list of Sites of Community Importance (and, in particular, whether the planning and development interests of municipalities could ground such refusal) (Case C-226/08)