Transportation 1 [608264]

1
1.1. The evolution and future of transportation worldwide

1.1.1. Evolution of transportation
Transportation as such consists in displacing an object with given characteristics from one
point to another, starting and arriving at given dates under specified conditions of quality and
safety. The first obvious characteristic of the transport product, therefore, is its very high
differentiation, mainly in terms of geographical heterogeneity: since every trip can be defined by
its departure and arrival nodes, in any country one can define an infinite number of different
potential products.
The history of transport systems is a history of revolutions.
Before every other form of transportation , humans traveled on foot. Can you imagine
walking from New York City to Los Angeles? Fortunately, human beings learned to use animals
such as donkeys, horses and camels for transportation from 4000 BC to 3000 BC. In 3500 BC,
the wheel was invented in Iraq and the first wheel was made from wood. Initially, a canoe -like
structure was used for water transportation, which was built by burning lo gs and digging out the
burned wood. In 3100BC, the sailing boat was invented by Egyptians while the Romans built
roads across Europe. Durin g the Industrial Revolution, the first modern highway was developed
by John Loudon McAdam.
In the 17th and 18th century, many new modes of transportation were invented such as
bicycles, trains, motor cars, trucks, airplanes, and trams. In 1906, the first c ar was developed
with an internal combustion engine. Many types of transportation systems such as boats, trains,
airplanes, and automobiles were based on the internal combustion engine.
The three leading automobile companies in the US in the 1920s were Gen eral Motors,
Chrysler, and Ford. Furthermore, several styles of automobiles were produced such as the two
doors, small, large, sports cars, and luxury cars. Presently, the latest car models have integrated
improved standardization, computer aided systems, and platform sharing. The modern railroad
system uses remote control for traffic lights and movement of traffic, capable of speeds of more
than 570 km/hr.
a) History of Airplanes
The Wright Brothers were the first to develop a sustained and powered aircraft in 1902.
Earlier, an unmanned helicopter powered by a steam engine was developed in 1877 by Enrico
Forlanini. Later, bomber aircrafts such as Lancaster and B -29 were designed, and the first
commercial jet airline was flown by British pilot De Havilland Com et. Today, commercial
aircrafts can fly at the speed of 960 km/hr, transporting people at a lower cost in less time.
Currently, unmanned remote controlled aircraft such as Global Hawk is used in military
operations.
b) History of Trains
Trains are connected v ehicles which run on rails. They are powered by steam, electricity or
diesel. The steam engine is mostly fueled by coal, wood or oil. The first steam powered engine

2
to be used in trains was introduced by James Watt, a Scottish inventor. The first rail
transportation was used to move coal from mines to rivers.
The modern rail system was developed in England in 1820, progressing to steam
locomotives. In 1825, Stockton and Darlington Railways opened and underground railway was
first built in 1863 in London. In 1880, electric trains and the trams were developed. Today, most
of the steam locomotives have been replaced by diesel. The fastest commercial High Speed Rail
trains which use magnetic levitation technology can go up to 431 km/hr.
c) History of Automobiles
Automobiles based on internal combustion engine were first patented by Jean Lenoir of
France in 1860. The first gasoline powered automobile was developed by Gottlieb Daimler and
Karl Benz in 1885. Modern automobiles were first developed in 1890s in Germany and France.
In 1891, William Morrison introduced electric powered automobiles in the US, which were an
improvement over the steam engines.
In 1893, the first automobile for sale was made by Charles and J. Frank Duryea in
Springfield, Massachusetts in the United States. It led to the development of gasoline and petrol
based automobiles. Henry Ford introduced the Model T Ford in 1903, which was successfully
launched. Mass production of the Model T, priced in the range of $825 to $17000, started in
1908. In 1 923, Alfred Sloan became the president of General Motors. Under his leadership, the
company launched a plethora of new models during this time. These automobiles made
transportation faster, more affordable, and more flexible for people.
Today, the automob ile industry produces more than 70 million vehicles across the world and
a rapid rise in price of oil and gasoline has led to the development of various green cars such as
hybrid cars, battery operated cars, hydrogen cars, and cars running on alternative f uels.
Figure 1.1. History of worlwide transport

3
Source: International Transportation: Moving the Global Economy Forward , DIANE Publishing
– An electronic Journal of the U.S. Department of State., Volume 5, and number 3;

1.1.2. Future of transportation worldwide
The last decades of the 20th century witnessed the extraordinary growth in international
economic relationships, the almost instantaneous flow of capital across national boundaries, and
the new production and distribution methods that collectively are termed globalization.
Developing countries, while still benefiting from lower labor costs, must rely less on abundant
natural resources and more on access to international transportation and telecommunications, the
quality of local infrastructure, and a su pportive policy climate to compete in the global
marketplace. Economically, advanced nations have adjusted to these changes and continue the
process of strengthening the integration of their economies and institutions and improving their
transportation and communications networks.1
Trucking and rail will continue to move commodities from their point of origin to
transportation hubs, where they are consolidated for long -haul movement or for distributing
shipments to the final points of delivery. Regional ec onomic integration, particularly in North
America and Europe, is generating a growing reliance on international trucking. In the future,
both international long -haul transportation systems and local distribution systems are expected to
face increasing dema nd and the problems of congestion, pollution, wear on roads, and delay in
border crossing are likely to intensify.
The larger ships, however, need expanded port facilities and greater channel depths. In the
future, this may force countries or groups of co untries to establish port development policies and
regulations that will guide the rational and efficient development of port infrastructure to employ
the available resources most economically.
Investments in new technologies will be needed if costs are to be controlled and service
levels improved. Technological solutions may not be adequate, however, without parallel
increased incentives for rail shipment and investment in rail infrastructure.
1.2. Types of transportation and their social and economic influence
Transportation represents the key to Globalization .
Globalization has dramatically altered the volume and pattern of freight and passenger
movement and has increased the demands on both international a local transportation systems.
The world has witnessed an unprecedented growth in the volume of international
transportation over the past few decades, reflecting both the growth of the global economy and
the associated increase in personal travel for business and pleasure.
Virtually all international shipmen ts require the use of more than one mode of transportation
from origin to final destination. Each of the world’s freight and passenger transportation modes
has played an essential role in facilitating geographical diversification. While transportation

1 International Transportation: Moving the Global Economy Forward , DIANE Publishing – An electronic Journal of
the U.S. Department of State., Volume 5, number 3;

4
cann ot claim exclusive responsibility for the success of economic globalization, it remains an
essential factor that cannot be compensated for or substituted. Firms invest in foreign locations
with the expectation that they can rely on international transporta tion services.
Aviation and maritime systems handle a major part of international freight transportation.
Trucking and rail transportation, on the other hand, are the predominant transportation modes for
shorter shipments linking the long -haul movements wi th local point of origin or final
destinations.
Perhaps more than any other transportation mode, aviation has grown on a worldwide scale.
Developments in air cargo and express package services that are essential to the operation of
international economy pr ovide a particularly compelling example of the way transportation can
contribute to economy and social growth.
In a growing number of locations, local street congestion is hampering the ability of trucking
to access intermodal terminals. Similarly, ground transportation congestion delays access to
airports by passengers and air cargo carriers . Many of the larger airports in the United States also
experience significant air traffic control and terminal delays. Policy initiatives toward meeting
these challeng es must focus on the linkages to global trade and travel networks and on the
systems that make a city a convenient and attractive place to live, work and invest. Quality of life
will be an essential ingredient of economic prosperity in the future, because the increasing
mobility of labor and its growing importance as a factor of production make many more locations
around the world suitable for investment.
Over the next two decades, growth in world trade and travel will continue as a direct
consequence of th e further internationalization of business and industry. The economic factors of
production will become ever more widely distributed around the globe. The ability of nations to
make public and private sector investments in transportation will determine whi ch compete
successfully and which minor players with declining economies and living standards become . All
of the transportation modes will play important roles in the global economy, whether for
transporting goods over long distances between nations and continents or for shorter movements
to and from intermodal terminals.
a) Air services
Aviation is one of this decade’s biggest economic success stories. In the United States, the
State Department, working closely with the Department of Transportation and othe r US
government agencies, has played a pivotal role in that success. 2They have worked to open the
skies from the Netherlands to New Zeeland, creating opportunities for private sector ingenuity to
develop new markets for goods, services, and ideas across t he globe.
Air transport has become the circulatory system of the global economy. Consider the
following facts:
 In a recent study, total economic activity related to airline services was estimated at
$976,000 million. Of that figure, provisions of service s accounted for approximately
$318,000 million, use of service for $529,000 million, and activity related to
manufacturing of goods for $126,000 million Earnings (comprising wages and

2 International Transportation: Moving the Global Economy Forward , DIANE Publishing – An electr onic Journal of
the U.S. Department of State., Volume 5, number 3;

5
salaries related to airline services) derived from airline operations we re $278,000
million. The industry itself accounts for 10.9 million airline -related jobs, including
employees of the industry, as well as those who support the industry, such as hotel
and travel service employee.
 About 40% of US exports value now moves by a ir.
These are just a few examples of the enormous impact of the aviation sector on our
economies.
The number of international airline alliances has doubled since 1994, providing
consumers with a range of choices in transportation services at considerably l ower costs. These
international networks have the ability to provide seamless service to hundreds of communities
and to connect those communities to the global marketplace in ways we could scarcely imagine
just a decade ago3.
Just as air transport networks and airline services have connected communities around the
globe, on a much broader scale the development and integration of telecommunications,
transportation, customs, and delivery services in support of electronic commerce will
revolutionize the way we do business in the 21st century. E -commerce has already become an
integral part of basic transport infrastructure – from delivery of goods and services, to the sales
and marketing of transportation services.
b) Maritime services: st aying competitive in a global ma rket
Maritime transport is the backbone of the increasingly globalized economy and the
international trade system. However, greenhouse gases (GHGs) and other emissions from vessels
and related activities in maritime trade have caused significant environmental impacts , especially
in coastal areas (Smith et al., 2014 ). As the functions undertaken by ports have expanded
significantly from just the handling of ships and cargo to the pursuit of a wide range of interests
(Gibbs et al., 2014), local pollution as well as climate change aggravated by GHG emissions from
the p ort area are now receiving more attention. Yet it remains difficult to harmonize economic
activities and environmental considerations both in seaborne trade and within the port4.
Figure 2.1. ALMOST TWO -THIRDS OF SHIPPING EMPLOYEES ARE EMPLOYED IN
FREIGHT T RANSPORT

3 Brooks, Peter W.; The development of air transport ; Vol. 1, No. 2 (May, 1967), pp. 164 -183;
Published by: University of Bath – www.jstor.org
4 Profillidis V.A., Botzoris G.N.; Evolution and trends of transport demand, Pages 47 -87; www.sciencedirect.com

6

Source: Oxford Economics
c) Rail transport
Rail transport has a crucial role in shaping Europe’s future. A well -developed network of rail
connections, including a dedicated high -speed rail network, caters to a demand of over 1.1 billion
passenger -kilometers daily and over 1 billion tonne -kilomet res of freight rail transport5. The key
role of rail transport is recognized in the European Commiss ion’s 2011 ‘Roadmap to a Single
European Transport Area’ (“White Paper”).2 Rail transport will be a significant contributor to
achieving the “Europe 2020” strategic ambitions of smart, sustainable and inclusive growth.
The demand for rail transport is essentially a derived demand – that is, one derived from the
capacity of rail to satisfy a mor e fundamental demand for mobility. Usually each traveller has a
demand for a specific service: from home to place of work and back, from home to vacation
location and back, etc. Similarly, each parcel has a specific demand (thou gh typically without
return) ; in what follows we shall consider mainly passenger demand. Such demand for a service
translates into a demand for a mode of transport that supplies this service. Different modes can be
thought of as supplying the service with different characteristics, w hich are substitutable for each
other to varying degrees .
The different characteristics of passenger services include speed, comfort, reliability and
flexibility (or adaptability to the traveler’s particular requirement s). For instance, road congestion
means that rail is often more reliable than road transport (in the sense that the arrival time is
predictable to a greater degree of accuracy), while rail is less adaptable than road (in the sense
that a car can take the passenger all the way to the final des tination instead of only to a station
along the way). Various intermediaries (such as travel agencies and logisticians) can increase the
adaptability of rail transport by acting to bundle transport services (including rail services) more
effectively than t he ind ividual customer acting alone.
Figure 2.2. Time and Distance Travelled using Different Transport Modes

5 Averages per day based on annual transpo rt performance figures for EU27 in 2010. Source: European Commission
(2012): EU Transport in Figures 2012

7

Source: Seabright , Paul; The economics of passenger rail transport: a survey ; January 2003;
Institut d’Economie Industrielle; p.13
Rail transport can be a substitute for cars, buses or aircraft, or even for inland waterways
depending on the distance and on the characteristics of the initial and final nodes6. But although
they may be to some extent comparable on the demand side (because the y share desirable service
characteristics to varying degrees), these different modes are very different in respect of both
technical and economic properties. For instance, rail transport is highly capital intensive by
comparison with most other modes. This arises from the high cost of acquisition, installation and
maintenance of tracks and stations; as well as the cost of acquisition, operation and maintenance
of the rolling stock. The result is that rail transport is characterized by strong economies of
density, as well as some economies of network size. These economies of network size are the
overall result of purely engineering considerations, which tend to favour scale, some economies
of coordination, and some diseconomies of complexity in the management of large organizations
(the overall balance between which can vary significantly between networks). There is also a
strong need for coordination between infrastructure operation and service supply, though
opinions have fluctuated over time as to whether s uch coordination requires vertical integration.

6 /www.researchgate.net/publication/5106636_The_Economics_of_Passenger_Rail_Transport_A_Survey

8

CH. I I. CAN THE IMPROVEMENT OF TRAN SPORTATION BECOME THE
BACKBONE OF THE ROMANIAN ECONOMY?

This chapter describes the curren t transport situation in Romania. It describes the situation
per mode of transport. The analysis of the current situation is summarized in a SWOT analysis
table on the main strengths and weaknesses. The assessment of the transport system is followed
by an analysis of the key transport policy issues in Romania.
The Romanian transport sector is clearly in need of investments in both its networks and
transport fleets. The investments needs not only relate to new infrastructure, but also to
rehabilitation of existing road and rail infrastructure. In doing so, proper attention needs to be
given to the generation of sufficient funds for maintaining the infrastructure and for improving
safety of the roads and railways. With respect to sustainable transport Romania has a strong
starting point in t hat presently railways have a substantial role in freight and passenger traffic. It
is important not to lose this potential, as it will be difficult to regain any ground lost to the road
sector.

Romanian s ituation per mode of transport

a) Roads and road transpo rt

The public road network totals nearly 80,000 km, of which 15,700 km are national roads
and 63,700 km are county and local roads. Of the total some 20,900 km are “modernized” roads;
the remaining roads are paved, but in need of rehabilitation, and grave l/earth roads. The total
motorway length is modest, at 210 km. Of the total length of the TEN -T7 road network in
Romania some 4,600 km have been rehabilitated.

7 The Trans -European Transport Network (TEN -T) policy addresses the implementation and development of a
Europe -wide network of railway lines, roads, inland waterways, maritime shipping routes, ports, airports and railroad

9
The motorway network has a significantly lower density than in countries of the EU25
and other neighboring countries. Furthermore, there is currently no motorway connection to the
EU motorway network

b) Railways

The railway density in Romania is above the EU25 average in terms of density per
population and is slightly below the average in terms of density per 1,000 km2.
The quality of the rail infrastructure is below average standard, leading to speed
restrictio ns on several routes. On about 27% of the network maximum speed is 50 km/h, while on
another 39% of the network the maximum speed is 80 km/h. The number of speed restrictions has
been increasing in recent years, affecting 624 km in 2018 , against 386 km in 1995.

c) Urban public transport

Major cities avail of municipal bus services. In addition, Bucharest is the only city in
Romania with a metro network. It consists of 62 km of double track, covering 4 lines and 45
stations. The metro system comprises 3.7% of public transport network. The network is currently
being extended by a total of 7 km and 8 stations
The main public transport operators in Bucharest are RATB, the surface public transport
operator under Bucharest Municipality providing bus, trolleybus and tramway services, and
METROREX, the metro network administrator, subordinated to the Ministry of Transport.
Even if Bucharest has a solid public transport network of trams, trolleybuses, buses and
metro, the vehicles of the fleet used by the public trans port operators cannot cover transport
demand, due to the following 4 reasons :
 The fleet has an ins ufficient number of vehicles.
 Average wear of the fleet is over 60 percent.
 The infrastructure of surface -rail transport is, on average, 65 percent worn.
 Ther e is no independent public transport authority.

d) Inland waterway transport

The inland waterway system of Romania is focused on the Danube River in the south of
the country. It also includes the secondary navigable branches of the Danube and the Danube –
Black Sea Canal. The length of the river in or along the border of Romania is 1075 km. The 170
km section between Braila and the Black Sea can handle maritime shipping.
Romania has 30 inland waterway ports with a combined handling capacity of 52 million
tones per annum. The largest ports are Braila, Galati, Tulcea and Sulina (in total 34 million tones
capacity) which are part of the TEN -T network. The inland ports have 48.5 km of quayside, of
which 85% is in poor physical condition due to their age and lack of maintenance.

e) Sea ports

Maritime transport is provided by the di rect access to the Black Sea through the three
maritime ports of Constanta, Manga lia and Midia. The port of Constanta is by far the largest of
the three and among the largest ports on the Black Sea, with a traffic capacity of 105 million

terminals. The ultimate objective is to close gaps, remove bottlenecks and technical barriers, as well as to strengthen
social, economic and territorial cohesion in the EU.

10
tones per year. It has nearly 30 km of quays with up to 19 m water depth. It can accommodate
vessels with a maximum capacity of 165,000 dwt for bulk carriers and 250,000 dwt for tankers.
The condition of the infrastructure is deteriorating, due to its old age and prolonged use over 40
years.
f) Airports

Romania avails of 17 civil airports, of which 12 are permanently open for traffic. The
most important airports are the two airports of Bucharest, the airport in Timisoara and the one in
Constanta. These four airports are oper ated by the Ministry of Transport (MTCT), while the other
12 are operated by county councils; 1 airport is private.

Table 2.1. Romanian transport system SWOT analysis
Strengths Weaknesses
 Strategic location between EU and
large neighbouring countries
 Extensive rail network available
 A large international sea port available
with access po ssibilities for large
vessels
 Potential for inland waterway t ransport
on the Danube river
 Competition in road passenger and
road freight sector  Capacity of the transport network
limited
 Quality of road and rail network is
low, partly due to insufficient
maintenance. Speed restrictions on rail
network.
 Road network not dense • Motorway
network not yet developed an d without
international links
 Limited electr ification of the rail
network
 Rail rolling stock outdated
 Use of railways is declining
 Danube navigation limited by depth
and width restrictions
Opportunities Threats
 Following EU accession new
opportunities to use additional funds
for developmen t of transport
infrastru cture
 Potential to develop new cost effective
and environmentally friendly bulk
freight and container traffic by
waterbo rne means on the Danube
River
 Potential to restructure rail operational
services (block trains) to increase the
use of the cost effective multimodal
transport modes  Insufficient funds avail able for
national co -financing
 Alternative transit routes outside
Romania are available
 Rail share may decline further if
services, cost level and efficiency will
not improve

2.1. The developme nt of the Romanian transportation system as a
gateway to economic development

11
The transport sector in Romania is an important pillar of the country’s economy. The
volume of freight transport amounted to 108% of GDP in 2012, i.e. above the EU average of
95%, but lower than most of its regional peers, with Bulgaria and Poland recording the highest
shares – 174% and 137% respectively. Freight transport by roads dominates as in other European
countries; however, an international comparison proves that its share of 53% is noticeably below
the EU average of 75%. In Romania, the remaining two quarters of the breakdown of freight
transport are accounted for almost equally by rail transport and inland waterways.
Romania’s location in the south of Europe provides an opportunity for it to connect East
with West. In particular, the country has direct access to the countries of the former Soviet Union
and covers the Balkans, Greece, Turkey and Western Europe, with Italy reasonably close. The
Pan-European transport routes also include Romania, with corridor IV coming from Dresden
through Prague, Vienna, Budapest, Bucharest, Sofia and Thessaloniki to Istanbul as well as
corridor IX from Helsinki through St. Petersburg, Kiev, Bucharest to Alexandroupolis with a
branch to Mos cow and other branches to Klaipeda, Kaliningrad, Minsk and Odessa. Moreover,
there is also the waterway corridor VII of 2,300 kilometres length on the River Danube
(Northwest -Southeast).
The volume of traffic has changed tremendously since the early 1990s due to a significant
improvement in social and economic conditions. Whereas car ownership in Romania was 60 cars
per 1,000 inhabitants in 1990, it has more than tripled since then and amounted to 203 cars in
2011. The estimates show that it even exceeded 4 00 cars in Bucharest and will continue to grow.
As in other European capital cities where car ownership figures have already reached 600 -800
cars per 1,000 inhabitants, it has also become an important infrastructural concern for Romania.
Moreover, the tran sport pattern has changed in those years, with rail traffic accounting for two
thirds of the overall structure in 1990, but with road traffic currently becoming increasingly
dominant8.
Domestic roads in Romania consisted of 550 kilometres of motorways and 83,635
kilometres of other roads in 2012. The total length of motorways was similar to Bulgaria,
although it was much higher in Hungary and Poland (1,515 and 1,365 respectively). The
infrastructure of the transport system can be explained by the geographi cal attributes of the
countries. Nevertheless, the length of motorways per 1000 km2 leaves Romania last in a
comparison with its peers, with just 2 kilometres as compared to 4 in Poland, 5 in Bulgaria and 16
in Hungary.

Figure 2.1.1. – Number of enterpri ses by mode of transport in Romania

8 Michael M. Stanciu, Search Corporation, “A personal view on the road transportation infrastructure programme for
Romania” presentation.

12

Source: Transport Statistical Pocketbook 2013

Transport companies in Romania account for 3% of those operating in the entire European
Union. The dominance of road freight transport is also reflected in the highest share of enterprises
active in that sector (64% as compared to the EU average of 52%). Nevertheless, the share
accounted for by the transport business also includes passenger transport, and the sector is
dominated by small and medium -sized enterprises.
Coface Romania has conducted an analysis of companies whose main activity is defined
as road transport. The research targeted 27,252 companies which filed financial statements on
business activities carried out during 2013. According to financial statemen ts published by the
Ministry of Finance, those companies generated a total turnover of RON 27 billion and employed
130,233 persons, i.e. they accounted for 3.5% of the number of employees registered in the
economy.

Figure 2.1.2. – Employment by mode of transport in Romania

13

Source: Transport Statistical Pocketbook 2013
Analyses of road transport companies by their turnover lead to the following conclusions:
 a quarter of companies that have filed statements for 2012 have not carried out any
activi ties
 half of the active companies registered a turnover of less than EUR 100,000/year (2013),
but the share of value accounted for by this segme nt is only 7% of total turnover
 only 1010 companies in this sector recorded an annual turnover exceeding EUR 1 million;
they represented 4% of total active companies, but generated about 64% of the revenues
recorded in the entire sector.

As indicated above, the road transport of goods accounts for the largest share of the entire
ector. These companies play the most important economic and social role in the sector. They
generate 63% of the turnover recorded in the entire sector and 67% of the total value of assets and
liabilities.
After analysing the profit and loss accounts as well as the balance sheets of companies
operating in the road transport sector, it can be concluded that only 4 out of 10 companies
recorded a contraction of turnover in 2013. The remaining companies recorded a gro wth in
revenues. Within that group, 35% of all companies active in the sector recorded growth of over
25% in turnover. Despite that, net profit has evolved much more weakly, both in terms of
absolute values and its dynamics.
One of the European Commission ’s recent recommendations concerned the low general
economic competitiveness of Romania. The main challenges include its underdeveloped transport
and information and communication technology (ICT) infrastructure. It was also concerned about
the rail transp ort sector, with the length of its network considered to be excessive with respect to
the volume of traffic and the capacity to finance it, as well as private railway companies
perceiving discrimination. Moreover, poor maintenance of the railway network ha s affected
safety and reliability. In the case of road transport, it has been noted that a high rate of growth of
the vehicle fleet and the low quality of the road infrastructure are hampering business and the

14
economy. Last but not least, freight transport on inland waterways remains far below its potential,
particularly on the Danube.9
The Large Infrastructure Operational Programme (LIOP)10 aims at promoting
sustainable economic growth as well as safe and efficient use of natural resources. It addresses
the development challenges identified at national level in terms of transport infrastructure,
sustainable urban transport, environment, energy and risk prevention. The programme will
mainly invest in removing the main transport bottlenecks and developing sust ainable, efficient
and green transport modes in the country. Another strong focus lies on measures to increase
energy efficiency and protect natural resources. It also invests in environment infrastructure and
risk prevention.

Funding priorities – The Program will focus on eight priorities:

 Improving mobility through the development of the TEN -T and the metro network ;
 The development of a multimodal, high -quality, sustainabl e and efficient transport
syste m;
 The development of environmental infrastructu re based on an efficient management of
resources ;
 Environmental protection by taking measures to pre serve biodiversity, air quality;
 monitoring and de -contamination of historically contaminated sites ;
 Promoting adaptation to climate change, risk prevention and management ;
 Clean energy and energy efficiency in order to support a low carbon economy ;
 Increased energy efficiency in centralized heating systems in selected cities ;
 Intelligent and sustainable transport systems for electricity and natural gas .

Expected impacts by 2023 in Romania included in The Large Infrastructure Operational
Programme:
 Travel time on the road TEN -T core network reduced to 74,1 Min/100km ;
 Travel time on the rail TEN -T network reduced to 79,2 Min/100km ;
 The quantity of goods ca rried by inland waterways will increase to 32,2 tones /year ;
 The share of metro system in public passenger transport in Bucharest will increase to
23%;
 The number of road fatalities per million inhabitants will decrease to 73 ;
 The number of passengers embarked and disembarked in airport transport will increase to
20 million/year ;
 An increase in the containerized cargo volume handled in intermodal terminals to 70.000 ;
 A decrease to half of the waiting time in customs at exit points in agglomerated period s
(carriers) ;
 The amount of biodegradable waste landfilled will be reduced to 1. 53 Mil. tones/year ;
 The recycling rate of household and similar waste will increase to 50% ;
 The level of population covered by public drinking water system will increase to 99, 5%;
 Restore 10% of the degraded ecosystems ;
 The annual average economic damage caused by adverse hydrological events will
decrease to 383,16 M eur/year ;

9 European Commission Council recommendation on Romania’ s 2014 national reform pro gram and delivering a
Council opinion on Romania’s 2014 convergence program.
10 https://ec.europa.eu/regional_policy/en/atlas/programmes/2014 -2020/romania/2014ro16m1op001

15
 The primary production of energy from less exploited renewable sources will increase to
455,96 MWh/year ;
 The energy intensity in the industry will decrease to 121,5 kgep/1000 EUR ;
 The energy losses in heating networks at national level will decrease to 15% in less
developed regions .

2.2. What can be done to transform the Romanian transportation
system into the driving force behind economic development
If strong infrastructure is considered a key factor in development, weak infrastructure is
usually seen as its opposite: a factor in underdevelopment. But decades of poor infrastructure in a
rapidly developing country have stimulated the growth of ‘poor infrastructure -related’ businesses
in Romania.11
The field of transport is considered a priority in the context of Romania’s development
plans, given its interdependence with the other branches of the economy, the value of the services
it provides for the population, and its considerable impact on the surrounding environment. The
main forms of transport are: road, rail, river, maritime, and air. Major deficiencies were identified
in the areas of sustainability, economic efficiency, safety, environmental impact, contribution to
the development of other branches of the economy, domestic and international connectivity, and
obtaining financing for investments.
In terms of road transport , motorways and national and E uropean roads account for only
21% of Romania’s road network. Almost 90% of the road network is made up of roads with one
lane for each direction, the condition of which, according to the agreed system of classification, is
50% good, 30% medium, and 20% po or.
This situation places Romania top of the list in Europe in terms of road accident fatalities,
with 94 fatalities per million inhabitants, compared with an EU average of 60; 259 fatalities per
10 billion passenger -kilometres, compared with an EU average of 61; and 466 fatalities per
million motor vehicles, compared with an EU average of 126. Moreover, the number of road
accidents involving pedestrians is much higher than the EU average. According to Eurostat, the
number of pedestrians involved in road ac cidents in the EU accounted for 22% of the total
number of road fatalities in 2013, while the figur e for Romania was 38% in 2017.12
The total length of the rail network in use was 10,774 km, of which 72% was single -track,
compared with an EU average of 59%, and only 37% of lines were electrified, compared with an
EU average of 52%. During the period 2004 -2017, the number of passengers fell by 30.3%, from
approx. 99 to 69 million passengers per year.
Romanian rail freight transport has suffered considerably d ue to the decline of heavy
industry. The amount of freight transported by rail fell from 67 million tonnes in 2008 to 56
million tonnes in 2017. Moreover, the growth in road freight transport saw the market share of
rail freight transport fall from 19.1% i n 2011 to 15.4% in 2017.
The average operating speed of passenger rail services in Romania is 44 -46 km/h, which
is almost half that for Great Britain and Germany, a situation which can only partially be
explained by the country’s mountainous terrain and wh ich is accentuated by the many stops, long
dwell times, and other technical factors. However, the safety of rail transport in Romania is quite
good, albeit there is still a large number of fatalities (58 on the rail network run by CFR, the

11 https://business -review.eu/news/analysis -how-romanias -infrastructure -woes -create -business -164252
12 http://ec.europa.eu/eurostat/statistics -explained/index.php/Road_accident_fatalities_ –
_statistics_by_type_of_vehicle

16
national rail co mpany, in the period 2007 -2011) in the form of suicides and roa d accidents at
level crossings.
Water transport occupies third place in the EU in terms of the share of freight transported
by inland navigable waterways and value in tonnekilometres owing to t he fact that Romania has
44% of the navigable sector of the Danube and the Danube -Black Sea and the Poarta Albă Midia –
Năvodari canals. The Port of Constanța, with a throughput capacity of approx. of 1.8 million
TEUs per year (with the potential to expand t o 2.5 million TEUs per year), provides further
potential for developing transport via inland navigable waterways and by sea.
With a total number of 20.2 million passengers in 2017 (compared with 783,000 in 2007),
air transport services play an important and growing role in the area of transport.13 Romania has
17 airports.
Intermodal transport is in its early stages in Romania, but it has a high potential,
especially in transit operations. The trimodal terminals (river, rail and road) of Galați and Giurgiu
have good prospects for development, especially in terms of containerisation.

SUSTAINABLE INDUSTRIALISATION
Romania needs an industrial sector with a minimum impact on the environment in order
to mitigate climate change, address the challenges of reducing industrial emissions of greenhouse
gases, energy efficiency and reducing resource use through use of clean technologies, and
promote ecological industrial approaches and environmental awareness raising programmes. A
competitive and sustainable industrial s ector plays an essential role in accelerating economic
growth, reducing poverty through productive activities, and meeting all of the sustainable
development goals established in the 2030 Agenda. In light of this, and in compliance with the
EU’s renew ed in dustrial policy strategy14, there is a need to support the consolidation of value
chains and implement the best performing technologies, to promote the circular economy and
competitiveness, to encourage industrial trade, and to develop the private sector, a gri-industries
and renewable energy.

RESEARCH AND INNOVATION
Romania belongs to the category of modest innovators, having for many years been one
of the worst perfor mers in Europe in this respect15 owing to the low level of expenditure on
research, develo pment, and innovation (RDI), which has constantly remained below 0.5% of
GDP. Owing to the duration and extent of this negative state of affairs, researchers from Romania
currently make up the largest scientific diaspora in the EU, with a notable contingen t also existing
overseas. This situation is due to the low interest of the economic environment for RDI activities
in general, and those carried out through one’s own efforts in particular.
Given the low contribution of private capital in the financing of research, development,
and innovation projects, action was taken to support research activity in the form of increasing
the income of RDI workers, through GD no. 751/11.10.2017 on the basic wage ceiling and
income tax exemptions for RDI employees. Measures were taken to stimulate RDI by businesses
in the form of direct financing instruments through National Programmes, financing instruments
such as guaranteed loans and risk capital investment, as well as other fiscal facilities for
companies.
There has been large investment in major infrastructure of international scientific
importance and involving the use of advanced and emerging technologies as part of major

13 NIS – Air Transport
14 COM 479/13.09.20 17: Investing in a Smart, Innovative and Sustainable Industry
15 European Innovation Scoreboard 2018, https://ec.europa.eu/docsroom/documents/30697

17
European projects: e.g. the Extreme Light Infrastructure – Nuclear Physics (ELI -NP) facility, a
very high power laser system and high intensity gamma -ray beam; and the DANUBIUS project
and the Danubius RI International Centre for Advanced Studies on River -Sea Systems, which
will support inter – and trans -disciplinary research on river -sea systems, etc. Another project
currently in progress is the RDI programme for Generation IV ALFRED reactors.

Romania’s Sustainable Development Strategy 2030 – HORIZON 2020:

 Improve connectivity between municipalities and regions by increasing the proporti on of
modernised county and local roads to 61% by 2020 (from 39.4% in 2016) ;
 Encourage and support, under fair conditions, foreign direct investment, and investment
based on local capital, with a focus on high and medium tech sectors, that generates high
added value and incorporates the latest achievements in the research and development of
modern technology, including in the defence industry ;
 Increase the budget for research by approx. 30% each year, ensuring a fair distribution of
budgetary resources, in order to support both applied research and innovation, and
fundamental and frontier research, with a focus on areas of smart specialisation/with
potential for growth ;
 Develop sectoral programmes for the financing of applied research both from the state
budget and by encouraging private investment and developing partnerships in this sector .

2030 TARGETS16:

 Modernise and develop quality, viable, sustainable, and powerful regional and cross –
border infrastructure, in order to support economic development and human well -being,
with a focus on fair and equitable access by all
 Improve road safety
 Rehabilitate the industrial sector in order to make it sustainable through a more efficient
use of resources and increased adoption of clean and ecological industrial te chnologies
and processes, with all countries implementing measures in keeping with their respective
capacities
 Stimulate in particular the digital economy and investment in industries which are at the
more profitable end of the value chain, which utilise t he results of national efforts in the
area of research, development and innovation, and which target stable and growing
markets
 Boost scientific research and modernise the technological capacity of the industrial
sectors; encourage innovation and significa ntly increase the number of employees in
research and development and increase public and private spending on research and
development
 Promote inclusive and sustainable industrialisation and increase the rate of employment
 Increase the access of small ind ustrial and other companies to financial services, including
accessible loans, and integrate them into value chains and external market

16 Romania’s SUSTAINABLE DEVELOPMENT Strategy 2030 – adopted by the Romanian Government on 9
November 2018 thr ough Government Decision 877/2018, was drawn up under the direct coordination of the
Department of Sustainable Development and with the contribution of the Editorial Commission, the General
Secretariat of the Government, the ministries and other central in stitutions, local authorities, regional development
agencies, academic and university forums, national institutes of research and development, employers’ associations
and trades unions, the private sector and non -governmental organizations, and other bodie s of civil society and
interested citizens.

18

Key transport -related issues identified in Romania’s N ational Development Plan were:
 Domestic transport, although diversified, has insufficient capacity for transporting freight
and passengers, especially in certain areas and during certain parts of the yea r (summer
season, week -ends);
 The transport infrastructure is insufficiently developed, and requires significant
investment in orde r to meet European standards;
 Access to the West -European corridors, as well as to the Eastern and Southern Europe
ones, is limited and made difficult by the low transport capacity and the quality of specif ic
physical infrastructures;
 Romania’s location at the crossroads of many roads connecting Eastern to Western
Europe and Northern to Southern Europe, as well as the location of the country on the
transit axes connecting Europe to Asia, points out the importance o f a developed
infrastr ucture;
 Romania’s access to the Black Sea and the Danube River represents an opportunity and an
argument to increase the level of transport on waterways, taking into account the low
costs as compared to land and air transport.

The main reasons for probl ems in the financing of the transport infrastructure in Romania
stem from a number of key issues that define the most important changes that have taken place in
the transport sector since 1990. It can easily be noticed in table 2.1. that unfortunatelly, th ere are
only bad impacts in Romania’s economy of the infrastructure changes that have happened after
1990.

Tabelul 2.2. The most important infrastructure changes after 1990 and their direct effects
in national economy
Infrastructure changes after 1990 Result of changes Consequent effects
Fundamental changes in the
structure of the transport sector
in Romania, from a State
planned economy (command
economy) to a market driven
transportation demand economy A significant reduction in
the number of tones –
kilometers of freight by
rail
Increased road congestion,
road vehicle operating costs
and road journey times

Decline of the industries most
likely to make use of rail
transport • Regional instability in
the neighbouring Balkan
countries
A change in the pattern of
international traffic flows
and under – utilization of
waterways for international
bulk freight and container
transportation
Reduced rail speeds

Inheritance of an inadequate
infrastructure and continued
under -investment
Increased need for t he
construction of new
transport infrastructure
A decline in the numbers of
rail passengers

Under -investment in
infrastructure maintenance Increased reconstruction
and rehabilitation need s of
transport infrastructure Increased environmental
degradation

19
A rapid increase in private
vehicle ownership
A rapid increase in the
volume of traffic on the
roads
Reduced competitiveness and
attractiveness of the
Romanian market for
investment

Decreasing usage of public
transport

Damage to road and rail
infrastructure due to widespread
flooding.

In 2018, the President of the European Bank of Reconstruction and Development (EBRD)
met with the President of Romania, giving the world its vote of confidence when it was
announced that the EBRD would increase their commitment in funding infrastructure projects in
Romania.
Road projects are important. Only 4.3 percent of roads in Romania are highways. To
remedy this Romania is planning two major highway expansions . In 2019, Romania will begin
planning a 51-kilometer highway called the Bucharest Belt. The Craiova -Pitesti Expressway is
the second highway for which Romania has begun to plan and accept bids. It will be 121
kilometers in length and is projected to cost nearly 820 million Euros.
Railways are another important way to move goods and people th rough and around the country.
The Romanian government has big plans for the rehabilitation and upgrading of its rail system.
There are 58 investment projects underway to improve Romania’s railway system at an estimated
cost of 2.8 billion Euros .
Infrastructure projects in Romania are not only dedicated to roadworks. The Danube river
is one of the most important rivers in European history. In Ancient History, it served as t he border
of the Roman Empire, from which Romania gets its namesake. The Danube has served as a major
artery for trade, bordering 20 countries starting in Germany and ending in Romania and Ukraine
at the Black Sea. The Romanian government plans to upgrade the Port of Constanta from 2020 to
2025. Improvements to the piers are estimated to cost $991 million dollars.17
Other improvements underway are plans to upgrade and expand Romania’s sewage and
water treatment systems. The EBRD and the Romanian government have earmarked 2.2 million
Euros for the project. The project will help provide more clean water and better wat er waste
removal to the people of Romania. The EBRD will not only provide money but will also provide
expertise in the planning process so that the funds are used most efficiently.
It will not be a quick process. Romania has many years of improvement ahead of it. It will
be an expensive and long -term task. Hopefully, the commitment of those involved will not falter
like earlier projects but will use future roadblocks as opportunities to grow as they work together.

17 https://borgenproject.org/infrastructure -projects -in-romania -key-to-the-future/

20

Bibliography:

1. Brooks, Peter W.; The development of air transport ; Vol. 1, No. 2 (May, 1967), pp. 164 –
183; Published by: University of Bath – www.jstor.org
2. European Commission (201 2): EU Transport in Figures 2012;
3. European Innovation Scoreboard 2018, https://ec.europa.eu/docsroom/documents/30697
4. International Transportation: Moving the Global Economy Forward , DIANE Publishing
– An electronic Journal of the U.S. Department of State., Volume 5, number 3;
5. Jenifer Van Vleck; Empire of the Air ; Harvard University Press , 2013 – Book Chapter
Mass Air Travel and the Routes of the Cold War (pp. 199 -238) – www.jstor.org
6. Oxford Economics
7. Michael M. Stanciu, Search Corporation, “A personal view on the road transportatio n
infrastructure programme for Romania” presentation.
8. Profillidis V.A., Botzoris G.N.; Evolution and trends of transport demand , Pages 47 -87;
www.sciencedirect.com – articol;
9. Romania’s SUSTAINABLE DEVELOPMENT Strategy 2030
10. Seabright, Paul; The economics of passenger rail transport: a survey ; January 2003;
Institut d’Economie Industrielle; p.1 -30;
11. Study on Strategic Evaluation on Transport Investment Priorities under Structural and
Cohesion funds for the Program ming Period 2014 -2020
12. https://business -review.eu/news/analysis -how-romanias -infrastructure -woes -create –
business -164252
13. https://borgenproject.org/infrastructure -projects -in-romania -key-to-the-future/
14. www.researchgate.net