By Andrea Harper, Deputy Editor, Property Secrets

€12.8billion is being invested in Romania's motorways to create the country's first national motorway network.

As part of a strategy to improve the country's transport infrastructure, the Transport Ministry is now implementing a major motorway construction programme. This aims to increase the motorway network from 114 kilometres to 2,319 kilometres by 2013. In 2008, the target is to complete 809 kilometres of new motorway.

This huge infrastructure project will provide the country with its first national motorway network. It will not only link the country's major cities but, essentially, also provide a link to Europe.

Critics have cited the lack of an adequate motorway network as a major obstacle holding back the Romanian economy.

There have been claims that business investors, although attracted by Romania's highly skilled workforce and low manufacturing costs, have been deterred by the country's poor motorway infrastructure.

Barriers removed

The new motorway network will remove this barrier. It is seen as providing a major boost to the economy and a hugely important magnet for further FDI into the county.

Although the capital has generally been the focus for FDI, an enhanced motorway network means business investors can choose from an even wider choice of locations.

Increased FDI will also lead to wealth creation and a greater demand for property. Not only is a prime location on the motorway network attractive to potential investors, it is also a desirable place for people to live as it is a great commuter area, with excellent transport links.

The main motorway projects currently being implemented include:

Transilvania Motorway linking Brasov and Bors. Two sections, from Suplacu de Barcau to Bors (64km) and Campia Turzii to Gilau (54km) are due to be finished this year.

Work is due to start in March on the section between Mihaileati and Suplacu de Barcau (76km). This is expected to cost €489million. Work on the Gilau - Mihailesti section is scheduled to start this year and is estimated to cost €149million. Both sections are due to be completed in December 2011.

This is currently the largest civil engineering project in Europe, which started in 2004 and is due to complete in 2013. When finished, this four-lane highway will cover 415 kilometres, stretching from Brasov across to Oradea on the Romanian border with Hungary. It will link the cities of Brasov, Fagaras, Sighisoara, Targu Mures, Cluj Napoca, Zalau and Oradea.

The Ministry of Transport has currently allocated €520million for the project in 2008. Construction costs were originally set at €2.2billion for the total project, but with rising construction costs and increased land prices, there is speculation this could double.

By the end of December 2007, the project directly employed 3,300 Romanians and more than 800 Romanian subcontractors.

Bucharest to Brasov Motorway. February is the start date for the construction of the section from Bucharest to Maora Vlasiei (19km) and further work is planned on the Moara Vlasiei to Ploiesti section and the Comarnic - Brasov section.

This is part of a €1.6billion project, which is being funded by the Romanian Government.

This year, construction is due to start on a series of major by-pass schemes to link a number of Romanian cities with the motorway network.

These include:

• The Ploiesti Vest by-pass
• The Constanta by-pass
• Bucharest Northern by-pass

These will provide a missing link between the Sun Motorway, which runs from Bucharest to Constanta, through to the Bucharest to Pitesti Motorway.

Segments of the Pan-European Corridor, connecting Constanta to Bucharest and Sibiu to Nadlac, on the western border, are due to be built this year.

In 2009, another 180km of motorway will be completed, with 682km under construction. These figures will rise to 238 km of completed motorway in 2010, with work underway on a further 907km of new motorway.

By 2013, the aim is that Romania will have 2,139km of new motorway and 507km of new expressways.

Source: Romanian National Company of Motorways and National Roads

The total estimated cost of building this new road infrastructure is €12.8billion.
Around €6.5billion is coming from the Romanian Government, with €1.5billion from the EU and €600 million from external loans.

The remaining shortfall of €4.2billion is expected to be paid through a private finance scheme, which will involve privatising parts of the motorway network. Companies can agree to cover construction costs for a section of new motorway and then charge an agreed toll.

Simon Blakeborough, Property Secrets' Investment Director, said: "€12.8billion is a truly huge investment. This road network is quite literally going to transform Romania's logistical landscape. I really see this as a massive boost for the economy long term.

"Romania has been criticised in the past for its poor motorways and there have been claims this has put major investors off. But the government has responded and put in place this very progressive strategy to link up whole country with a national motorway network.

"A lot of Romania's third tier cities have fallen under the radar of property developers, but the new motorway network will certainly put them on the map. They present great investment opportunities as they will combine great locations with excellent transport links."