Debauchery and incompetence at the Highways Company. Who is responsible?

The Court of Accounts has recently made public the „Special report on construction and maintenance of highways 2005 – 2010”. As CCR reports are usually boring and neutral, the report shows the causes for which Romania has just415 kmof highways at the end of a decade of massive funding.

If a carrier would have an employee who hardly meets only 25% of tasks, he would be fired the next day. Nobody fires CNADNR directors. They receives 10,000 monthly. CNADNR receive annual stipends of billions of euro (from the budget or EU), whose direction is unclear.

„The aim of the audit was an independent analysis on all the issues, circumstances and activities falling within the large and complex field of construction and operation of highways, identifying vulnerabilities, failures, shortcomings and potential areas for improvement and making recommendations to increase the performance level specific to that activity”, is mentioned in the opening report.

 

They built only 414 km of 1700

 

According to Romania’s pre-accession arrangements, at the end of 2015, we had to have1.736 kilometersof highway. Of them, only a quarter was made:414.9 km- less than 24%. 13% are highway relief roads.

Responsibilities shared by the company with the Government

 

While some of the causes are to be reproached to CNADNR, others are related to the Ministry of Transport (MTI) and the Government. A cause is the frequent changes of company’s management. In five years, the ministry has been managed by five ministers. The membership of General Meeting of Shareholders was amended 12 times, the Board of Directors 20 times and have been nine directors.

Organization has changed 20 times. Rather than mandate GMS members and BD on performance criteria, Ministers have delegated them on certain stuff, substituting them. There were no standardized, clear procedures, for investment prioritization, tendering etc.

Problems noticed at highways

  • repeated changes in CNADNR leadership, without any connection with the performance criteria
  • lack of political will for a national highway pact, primarily funded
  • signing contracts with illegal provisions that have not been renegotiated by the state, such as the one with Bechtel.
  • underfunding some projects, ignoring other important projects, such as Buzau – Albita highway
  • not imposing penalties by CNADNR to its trading partners or no potential penalty of contracts

There was no consistency and continuity in the highways works. There was no national pact, although it was promised in 2009. There was no free will and vision to set priorities and to fund it, to make them operational. To this day, the Government has not been liable for not achieving the objectives such as highways Bucharest – Nadlac, Bucharest – Brasov – Bors, Buzau – Albita or Bucharest ringroad, says CCR.

 

Transylvania Highway mistake: neither white nor black

 

Government and MTI have never canceled the contract, nor have secured funding, says CCR. „There is and still remain sufficient questions concerning the contract between CNADNR – Bechtel and in the documents provided, there is no sufficient motivation and justification of: direct entrustment of the contract, the haste with which legislation was promoted in 2003, the absence of real negotiations, promotion and approval by the Government of a contract form with some clauses unharmonized with the Romanian legislation and / or setting out the obligations and responsibilities, disproportionate for Romania”.

1.27 billion euros were charged by Bechtel, about half the original amount of 2.7 billion euros, even though they made only50 kilometers of highway, i.e. the eighth part of the total length of400 kilometers.

During 2004 – 2011, the project received 53% – 55% of funding determined by budgeting. CCR notes the Government approval of a contract with the questionable issues, unfavorable to Romania, lack of governments reaction for seven years to restore contract equality and classification. Relevant documents were not made available even to CCR, CNADNR arguing that they can not find it or the responsible staff left.

 

Highways started five years after signing the contract

 

Even the few finished sections were not free of problems. It is the case of Timişoara – Arad highway and Arad ringroad. Work began in 2009, five years after signing the contract with the European Investment Bank (EIB) and had to be completed in 2008. Work values were exceeded. Extensions of time requested by the manufacturer were of 561 and 581 days, and prices have increased by 17% – 24%. The works were not received so far. The traffic was open with restrictions. It’s understandable why CNADNR, in the contract with the international consultant, did not include penalty clauses, say the controllers.

 

 

 

Snow removal, other error

 

CNADNR bears the blame for bad traffic conditions in winter, not the snow removal companies, says CCR. Until recently, snow removal standards set only the number and type of equipment on intervention levels, not the necessary power or performance.

„There was no concern and will, necessary to carry out impact studies and technical and economic substantiation regarding the purchase by the company of some types of machinery and advanced equipment, of strict purposes, to professionalize snow removal interventions”, the report states.

In addition, although the law requires the installation of forest belts in collaboration with the Ministries of Environment, Agriculture and Transport, the provisions were not respected. CNADNR staged 38% of its highway snow protection fences. There are areas where the percentage was 0%.

 

CNADNR wasted the money on rents, rather than purchase its own equipment

 

Instead of buying equipment, CNADNR preferred renting it without a cost-benefit analysis. Such an analysis would have been necessary, since during winter 2005/2006 – 2009/2010 funds used for rental services of tools and equipment were approximately 29,312.4 thousand lei (6.8 million euro, at an exchange rate of 4.3 lei / euro), representing approximately 90% of the total amount paid for providing the necessary equipment, skid materials, fuel, etc. (32,569.35 thousand lei)”, says CCR.

Conclusions of the Court of Auditors

„Legally established national targets and objectives on highway construction have not been reached / achieved at the level and time established, both for lack of political will from the Government to provide necessary conditions (legal, organizational, financial, etc.), their achievement and recognition of the fact that neither MTI nor CNADNR have not taken and and performed a real and powerful role of main entities, with the maximum responsibility in the development, implementation and completion of the legal terms of priority programs and projects related to highways „

Of this money, analysis controllers continue, they could have provided the acquisition of approximately 33 multifunctional machines, equipped with turbomilling, skid material spreading equipment, snow blade, universal plow with two movable blades, front brush and specific equipment for coupling and driving, equipment that could serve not only highways, but also part of national roads.

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