KPMG: Romania faces insurmountable delays in infrastructure

A mere 14 percentage of the surveyed believe that infrastructure is “completely adequate” in this regard.

“Not only the investments in infrastructure draw commercial companies, they create job opportunities and gear revenues from taxes, but it is ascertained that an infrastructure project constitutes an economic incentive if it is properly managed. Unfortunately, Romania faces insurmountable delays in the fields”, said Daniela Nemoianu Istocescu (photo), Coordinator of Risk Advisory Services of KPMG in Romania.

With drained budgets at central and local level, 80% of executives want governments to partner with the private sector to finance major infrastructure projects. “From our previous experience in West and Central Europe, we consider that mayoralties should focus more on Private Public Partnership formulas”, Nemoianu added.

Analysts estimate the amounts spent for infrastructure development globally until 2015 will reach two thousand billion dollars annually. However, the respondents from each region expressed their concern towards the inadequacies of investments in infrastructure. Business executives in Eastern Europe and Asia Pacific cited great interest towards this subject, with 89% and 84% expressing their concern. The study revealed rising worries in mature markets, with 74 and 64% respectively of the business executives in United States and Western Europe.

KPMG survey (conducted by Economist Intelligence Unit) found that business executives think that infrastructure will gain more weight in the next five years, and the availability and quality of infrastructure will directly influence leaders’ decision to find new ways to develop competitive solutions.

Infrastructure gains weight

Most of the respondents – 80%- said that infrastructure would play a more important role for their businesses. While in Asia-Pacific there was the highest number of respondents, 87% respectively, who said that infrastructure would gain weight within the next five years, it is interesting that figures in United States and Middle East/Africa, Latin America, Eastern Europe are almost similar – with 80% of the respondents saying that infrastructure will play a more important role in five years. In Western Europe, the percentage is 63%.

In the survey, 90% of executives agreed that the availability and quality of infrastructure affects where they locate and expand their business.

Transportation and energy supply – in most need of attention

Two thirds (66%) of the respondents said the infrastructure in transportation and power supply infrastructure were adding greatly to the cost of operating their organizations. As the survey found, roads and energy are in most need of attention at global and regional level. For example, the roads were signaled as in urgent need for attention by nearly two thirds of (61%) of the surveyed in United States and by 40% in Western Europe, while one third of the respondents in both regions identified power supply and schools as critical needs in infrastructure.

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