Hidroconstructia teams up with foreign firms

“Conditions of contract documents for tenders have very strict criteria, barring Romanian companies from winning major contracts,” says Emil Timofti, general manager of Hidroconstructia, Romania’s biggest construction company.
All the important deals on the construction market, the major public contracts worth hundreds of million euros, have, for a number of years been awarded to foreign companies, while Romanian firms, irrespective of their size, do not have access to contractor position in the contracts mentioned above.
Foreign players also prevail on the private projects market, which is why international firms operating in this field are able to profit from the high growth rate of the construction market, which is now driving the entire economy.
In the case of major public projects, conditions of contract specify firms taking part in tenders are required to have previously carried out similar work.
“Domestic construction companies need to seal partnerships with their foreign counterparts in order to become them stronger and get major infrastructure contracts,” considers Timofti.
According to the Hidroconstructia representative, this solution was embraced by Hungarian firms, which initially set up joint ventures with foreign firms and then teamed up with one another.
Hidroconstructia representatives say that work carried out as a subcontractor is not taken into account in tenders.
In the highway construction business estimated at 7 billion euros in total, Hidroconstructia was the subcontractor of the US-owned Bechtel Corp., the general contractor of Brasov-Bors highway, an over 2.4 billion euro project.
One year ago, the Ardeal branch of the Hidroconstructia group, which specialises in hydropower, estimated it had lost about 2.5 million euros following the cancellation of the three contracts it had with Bechtel for the Transylvania highway.
Moreover, Hidroconstructia is a subcontractor of Italy’s Astaldi company in an orbital road construction project in Pitesti and Craiova, as well as of the Italian company Todini, which is building an orbital road in Sibiu.
In the first half of 2006, the company derived turnover worth around 80 million euros, up 30% from the similar period last year, according to its representatives.
“In the first 6 months we had more contracts in progress than in the same period last year, and the good weather has allowed us to carry out more excavation work,” state the company’s representatives.
The company’s main customers are Hidroelectrica, Termoelectrica, ANAR (The National Romanian Waters Administration) and the Transportation, Construction and Tourism Ministry.
Over recent years the company has tried to team up with foreign constructions firms to seal bigger contracts, with European funding.