Prime Minister Viorica Dăncilă’s statements at the 2019 European Automotive Industry Forum
Ladies and gentlemen,
I am glad to see such a numerous presence to this event devoted to one of the strongest industrial activities in the European Union: the automotive industry.
Europe is undergoing major changes that are launching new challenges for the entire European community: economic, social, political ones. We are all duty bound to act rapidly and with determination, to be proactive and engaged, to work together in order to keep the resilience of the European economy, and implicitly, of the automotive industry.
We are in one of the most important economic centers of the country, in whose development the car sector played a decisive role. Today’s event takes place in Craiova, under the rotating Presidency of the EU Council exactly in order to underline the importance of this industry for Romania.
As you could see, a large number of Ministers accompanied me on this visit as I wanted to convey a strong message on the part of the Government. I am now among you in order that we find together mutually advantageous solutions and programmes. The Government supports you to develop, create new jobs and generate economic growth and implicitly a better life for Romanians.
The automotive sector means not only in Romania but in the entire Europe, great added value products in exports, essential factor for the competitiveness of the economy. But it equally means more than this: stable jobs, a model of adaptability to change, a lever of inclusion and improvement, a better life for citizens.
Romania, state holding the rotating presidency of the EU Council managed to advance works on a series of important dossiers for the increase of competitiveness, the development of industry and implicitly for the automotive industry. I want to thank you for the involvement of the European Parliament, the European Commission and the team that successfully managed, and continues to work with determination on important topics for our future.
If we refer to digitalization, the conclusions on artificial intelligence, promoting clean vehicles and encouraging the purchase by public authorities of non polluting cars, norms to support investment adjusted to business sector requirements, we are working at both European and national levels to foster the automotive sector development.
Ladies and gentlemen,
Romania has one of the highest economic growth rates in the EU for some years, which shows that it is not a conjunctural situation. It is a lasting process, a sustainable one, the result of activity and private sector competitiveness.
In 2017, the economic growth was 7 percent, and in 2018, 4.1 percent, which means an annual average of 5. 5 percent, what we seek to attain this year too.
The automotive industry is one of the pillars underpinning the development of the Romanian economy, both through its own performances and especially through the effect of engagement and economic multiplication, as well as through the large number of employees.
The car sector was the engine of Romania’s exit from recession following the economic crisis and is today the propeller of growth and national economic development.
In recent three years, the annual average growth pace of this sector was over 13 percent, a lot over that of industry, of 4. 3 percent. It also had an important role as regards the trade. In the first 11 months of last year, the share of road transport vehicles in the total of exports was 17. 4 percent whereas the imports represented only 10 percent.
After the constant growth of recent years, 2018 was an extraordinary year for the automotive industry. Romania achieved a record vehicle production last year, a 30 percent increase compared to previous year. It is a strong signal of confidence for the Romanian economy, and the business environment.
The Romanian Government is firmly committed to continuing and developing policies and projects to back industry and car components, receptive of international trends, and preoccupied with meeting expectations in this field.
We are pursuing several action directions: stimulation of research –development –innovation, essential to boost competitiveness, investment in continual training of labor force, aid granting through state aid schemes and encouraging the purchase of new cars, non polluting vehicles.
Backing financing instruments and granting facilities designed to foster research –development –innovation and the technological transfer represent one of the conditions for the development of a modern and long –lasting automotive industry.
Through the National Research –Development Plan 2015 -2020, we finance projects designed to contribute to boosting the competitiveness of the Romanian economy, through increase in enterprises’ productivity and the progress in value chains. They target to an overwhelming extent the automotive industry, both car and the car components manufacturers.
I mention the tax incentives for the economic operators performing research activities. I refer to 50 percent additional deduction of eligible spending for these activities and but also to the income tax exemption for research –development –innovation employees, as well as the 10-year income tax exemption for research firms since 2017.
And last but not least, we are concerned with the most burning issue for the automotive industry: transport infrastructure. We have amended the legislation to increase the possibility of developing the infrastructure including through the Private Public Partnership. We will take other measures to ease and speed up this process. The Transport Minister is here today with me, and he knows the burden on his shoulders. After so many years of slow-moving things, the Government I am leading has taken up this challenge. And we will prove it is achievable.
People are right, they are right to be upset about the pace in which works have been performed in this area. But the truth must be fully said. In the PSD governments, over 500 km of the existing highways were built. In other governments, there were zero km built! And let us not forget that the Romanian Minister of Transport of 1999, who became later the President of Romania, explained that: “Romania does not need highways, national roads are enough.” We have been fighting for years with this profoundly wrong mentality, also with a series of intentional hindrances.
I made this paranthesis to call things by their name. Yes, it is an essential issue for Romania’s future development, but we can only resolve it by action, not by political circus and political statements.
Specifically, last week, works began on the first kilometers of highway in Moldova. And because we are in Craiova, Craiova – Piteşti express road is already in advanced construction stage. It will have a length of more than 121 km, and a total estimated value of almost 5 billion lei, including VAT, and for a more efficient achievement, the objective was divided into 4 sections.
Contracts for the design and execution of the four sections were auctioned in 2017, and the contracts for sections 1 and 2 were already signed in December 2018.
Basically, this year, road sections 1 and 2, 57.55 km long and with a combined value of more than 2 billion lei with VAT, entered the design phase.
I have to say that auctions for sections 3 and 4 have been cancelled in court.
At this point, the documentation required for these road sections is in the update procedure in order to be able to be re-launched again this year.
The programme of upgrading the railway line on the section Arad – Caransebes – Craiova – Calafat and Craiova – Bucharest –Constanta Port which will help to increase the transport capacity, reduce travel times and eliminate speed restrictions is ongoing. Last but not least, the Government recently approved the Bucharest-Craiova-Drobeta-Lugoj project with bifurcation, and the one from Craiova towards Calafat is to be implemented in the Public Private Partnership. In April, the substantiation study will be ready to be auctioned.
The Pitesti-Sibiu project, equally awaited, is well advanced. Design and execution of Section 1 Sibiu – Boita – the tender evaluation process has been completed. The winner was announced. Today the challenge period expires and if everything is fine, by the end of the week we can sign the contract. The tender evaluation process was also finalized for the design and execution of Section 5 Curtea de Argeş – Piteşti.
Design and execution of Section 4: Tigveni – Curtea de Argeş – the tender documentation for the launch of the public procurement procedure was finalized and submitted for publication to ANAP in January 2019. It is visible in the SICAP (Collaborative Information System for Public Procurement).
As regards Sections 2 and 3 of the Sibiu – Pitesti highway, there is a deadlock because of the challenge of the Environment Agreement obtained in December 2018. We hope we can escape this permanent blockage of challenges that we are facing for years.
The Romanian Government is a partner of the business environment and as I underlined, it supports the development of projects with effect of economic engagement. In this respect, we assured the funding necessary for the state aid scheme with major impact in the economy, we simplified it and rendered it flexible, so that as many companies as possible benefit from this aid.
Five of the 14 financing agreements signed at the end of last year on the basis of this policy, are for projects of some companies in the automotive industry, including of car components. The development of these projects in total amount of 1 billion lei will have important economic and also social effects, through the creation of nearly 1,300 new jobs.
In this year’s state budget, the policy of boosting investment through granting state aid will continue to occupy an important place. We provided appropriation commitments of 1.6 billion lei, which implies funding investment projects of at least 4 billion lei.
Therefore, the objectives of the Cabinet I am leading are equally focused on supporting the private sector, which substantially contributes to GDP growth and better living standards for all citizens.
At the same time, in the automotive industry, as in all economic competitive branches, continual professional training and permanent adjustment to new are vital.
It is obvious the fact that the digitalization and the computerization are the future in the car industry. As Prime Minister, I am concerned for this natural and beneficial trend for the economy not to turn into social vulnerability.
In this context, it is necessary more than ever to invest in people, in boosting their competitiveness, and in securing better work conditions, in line with the principles of the European Pillar of Social Rights.
The Romanian Government developed levers whereby to stimulate both employers to invest in training the workers and the employees to be preoccupied with an increasingly better professional qualification.
I refer here to the Programme „ Invest in yourself” and also to other policies financed through national and European policies whereby we encourage employment and the increase of workers’ competitiveness.
Ladies and gentlemen,
Clean technology is the future. In line with the European objectives of environmental protection, through reduction of greenhouse gas emissions, but also with the European and world trends in the automotive industry, the Romanian Government encouraged the purchase of new cars, less polluting, through the programes devoted to car park renewal which have been carried out by the Environment Ministry.
In recent years, we promoted a program whereby we support citizens to buy new cars, with state guarantees.
We have already prepared a draft normative act whereby we can render flexible and adapt this program to the European and world trend of shifting emphasis on hybrid and electrical vehicle manufacturing.
In addition to the good effects for the car industry and that of car components, with a significant share in the national economy, we envisage the benefits for environment too.
A common effort and new solutions are required for non polluting, hybrid and electrical vehicles to be more accessible to citizens.
Therefore, ladies and gentlemen, you have in the Romanian Government a trustworthy partner that is open to doing much more through open and fair dialogue with the business environment, at both national and European levels.
I have confidence that through talks like those held today between representatives of the European Commission, national and European Parliament, representatives of Government and citizens, car industry and car components industry, we can achieve the results expected.