ACCESS WAYS FOR DEVELOPMENT IN THE TWO MAIN … · city of Cluj-Napoca to the marketing center and other processing facilities in the city, access which currently is unavailable for

ORADEA LOCAL COUNCIL CLUJ COUNTY COUNCIL

ACCESS WAYS FOR DEVELOPMENT

IN THE TWO MAIN ECONOMIC CENTERS

OF THE NORTH - WEST REGION:

ORADEA AND CLUJ - NAPOCA

Prepared by:

2005

Volume II - Feasibility Study

Financing Application under the PHARE 2004 - 2006 Financial Instrument Feasibility Study Quantum Leap S.A. – Project Development and Financial Advisory Services

Access Ways for Development in the two Main Economic Canters of the North-West Region - Oradea and Cluj Page 1 of 97

Contents

Contents ............................................................................................................................................ 1 General information........................................................................................................................... 5

Project Name................................................................................................................................. 5 Beneficiary ..................................................................................................................................... 5 Financing Authority ........................................................................................................................ 5 Contracting Autority ....................................................................................................................... 5

Introduction........................................................................................................................................ 6 Location............................................................................................................................................. 8

Location of Component 1, „Primary access road to the industrial area North-West Oradea–Bors”........................................................................................................................................... 8 Location of Component 2 „County road linking agricultural areas in Cluj County to marketing and processing centers in the vecinity of Cluj Napoca” .............................................................8

Scope of work.................................................................................................................................... 9 Analysis of Opportunity and Necessity for the Project (Demand).................................................. 9

Analysis of Opportunity and Necessity for Measure 1 - „Primary access road to the industrial area North-West Oradea–Bors” .................................................................................................9 Analysis of Opportunity and Necessity for Measure 2 - „County road linking agricultural areas in Cluj County to marketing and processing centers in the City of Cluj Napoca” ..................... 13

The investment background and justification ....................................................................... 13 Positive impact consistent with the main objectives include:................................................ 17

Technical Report ............................................................................................................................. 18 Land Ownership and Land Management..................................................................................... 18 Component 1 -„Primary access road to the industrial area North-West Oradea – Bors”............. 18

Existing situation ...................................................................................................................... 18 Overpass on Dacia Bvd........................................................................................................19 Road bridge over the Crisul Repede river ............................................................................19 Tubular culverts .................................................................................................................... 19

Geotechnical Study .................................................................................................................. 20 Proposed Solution – Presentation of Works ............................................................................21

Works proposed for Podului Street.......................................................................................21 Works proposed for the sector between the road bridge over the Crisul Repede river and Mestesugarilor street ............................................................................................................ 21 Works proposed for the sector between Mestesugarilor Street and Darabant street........... 22 Works proposed for the sector between Darabant street and Calea Santandrei ................. 22 Works proposed for the sector Calea Santandrei................................................................. 22 Main features of the proposed construction works ............................................................... 22 Storm Runoff ........................................................................................................................ 25 Construction Structure.......................................................................................................... 25

Cost projections ....................................................................................................................... 28 Permits and Authorizations ...................................................................................................... 28

Environmental Considerations ........................................................................................................ 38 Component 1 - Access road to the N-W industrial area Oradea – Bors ...................................... 38

Water........................................................................................................................................ 38 Hydro geological features of the site .................................................................................... 38 Water supply......................................................................................................................... 38 Waste Water Management...................................................................................................38

PHARE Application for Oradea and Cluj Feasibility Study Quantum Leap S.A. – Project Development and Financial Advisory Services

Access Ways for Development in the two Main Economic Canters of the North-West Region - Oradea and Cluj

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Impact................................................................................................................................... 38 Air............................................................................................................................................. 38

General specifications .......................................................................................................... 38 Pollution sources and agents ...............................................................................................39 Air pollution forecast ............................................................................................................. 40

Soil ........................................................................................................................................... 41 Types of soils in the area and their features.........................................................................41 Soil pollution sources............................................................................................................ 41 Environmental impact forecast .............................................................................................41

Subsoil ..................................................................................................................................... 42 Tectonic structure, neo-tectonic activity, seismological activity............................................ 42 Protection of subsoil and ground water resources ............................................................... 42 Pollution of subsoil, including rocks......................................................................................43 Subsoil quality ...................................................................................................................... 43 Subsoil resources ................................................................................................................. 43 Extraction conditions for the natural resources .................................................................... 43 Relationship between the subsoil resources and the protected areas or the landscape...... 43 Conditions for the execution of geological engineering works.............................................. 43 Geological processes - landslides, erosions, carst areas, areas prone to landslides .......... 43 Valuable protected geological objectives .............................................................................43 Expected environmental impact ...........................................................................................43

Biodiversity............................................................................................................................... 43 Information about the ecosystems in the site .......................................................................43 Expected impact and reduction measures ........................................................................... 44

Landscape................................................................................................................................ 44 Social and Economic Environment ..........................................................................................44 Ethnic and Cultural Conditions.................................................................................................44 Conclusions.............................................................................................................................. 44

Interpretation of results per environment factors: .................................................................45 The analysis of the worthiness grades leads the following conclusions:.............................. 45 Pollution Index ...................................................................................................................... 45

Component 2 - County road connecting the agricultural areas in the Cluj county to the marketing and processing centers in the city of Cluj Napoca.......................................................................45

Water........................................................................................................................................ 45 Hydro geological features of the site .................................................................................... 45 Water supply......................................................................................................................... 45 Waste Water Management...................................................................................................45 Impact................................................................................................................................... 46

Air............................................................................................................................................. 46 General specifications .......................................................................................................... 46 Pollution sources and agents ...............................................................................................46 Air pollution prognosis .......................................................................................................... 48

Soil ........................................................................................................................................... 48 Soil types and features in the area .......................................................................................48 Soil pollution sources............................................................................................................ 48 Impact prognosis .................................................................................................................. 48

Subsoil ..................................................................................................................................... 49 Tectonic structure, neo-tectonic activity, seismological activity............................................ 49



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Protection of subsoil and ground water resources ............................................................... 50 Pollution of subsoils, including rocks .................................................................................... 50 Subsoil resources ................................................................................................................. 50 Extraction conditions for the natural resources .................................................................... 50 Relationship between the subsoil resources and the protected areas or the landscape...... 50 Exaction conditions for the geological engineering works .................................................... 50 Geological processes - landslides, erosions, carst areas, areas prone to landslides .......... 50 Valuable protected geological objectives .............................................................................50 Expected environmental impact ...........................................................................................50

Biodiversity............................................................................................................................... 50 Information about the ecosystems within the site area......................................................... 50 Expected impact and reduction measures ........................................................................... 51

Landscape................................................................................................................................ 51 Social and Economic Environment ..........................................................................................51

Ethnic and Cultural Conditions .............................................................................................51 Conclusions.............................................................................................................................. 51

Interpretation of the results per environment factors: ...........................................................52 The analysis of the worthiness grades leads to the following conclusions:.......................... 52 Pollution Index ...................................................................................................................... 52

Capital Investment ....................................................................................................................... 53 Macroeconomic Outlook .............................................................................................................. 54

Background.............................................................................................................................. 54 Historical Development.........................................................................................................54 Post 1990 Evolution and Steps towards EU Accession ....................................................... 54

Current Situation ...................................................................................................................... 55 Inflation and Exchange Rates...............................................................................................55 Foundations of Economic Growth ........................................................................................57 Economic Growth Scenarios ................................................................................................58

Market Study ................................................................................................................................... 60 Project Component 1 - The main access road to the N-W industrial area Oradea - Bors ........... 60

The Oradea Metropolitan Area.................................................................................................60 Demographic Profile of the Oradea Metropolitan Area.........................................................62 Economic Profile................................................................................................................... 64

Project Component 2 - County road connecting the agricultural areas in the Cluj county to the marketing and processing centers in Cluj Napoca ......................................................................69

Demographics of Cluj County ..................................................................................................69 Economic Profile of Cluj County and the city of Cluj-Napoca .................................................. 71

Analysis of Competitors ............................................................................................................... 75 Objectives of the Analysis............................................................................................................ 76 Component 1, -„Primary access road to the industrial area North-West Oradea – Bors”............ 77

Assessment of Economic Benefits........................................................................................... 77 Assumptions ......................................................................................................................... 77 Economic Ratios Calculations ..............................................................................................81 Sensitivity analysis ............................................................................................................... 81

Component 2 - County road connecting the agricultural areas in the Cluj county to the marketing and processing centers in the city of Cluj Napoca.......................................................................83

Assessment of Economic Benefits........................................................................................... 83 Assumptions ......................................................................................................................... 83



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Economic Ratios Calculations ..............................................................................................87 Sensitivity analysis ............................................................................................................... 87

Risk Identification......................................................................................................................... 89 Project Concept Risk................................................................................................................ 89 Construction Risk ..................................................................................................................... 89

Financial Risk .............................................................................................................................. 89 Organizational Risk...................................................................................................................... 89 Legal Risk .................................................................................................................................... 90 Definition of Services ................................................................................................................... 90

Services Provided Directly to Users.........................................................................................90 “Services”, i.e. Benefits, Provided to the Taxpayers ................................................................91

Key Competitive Assets............................................................................................................... 91 Local contribution ..................................................................................................................... 91

Sustainability of the PHARE Project ............................................................................................92 The Municipality of Oradea ...................................................................................................... 92

Legal Responsibilities & Jurisdiction ....................................................................................92 Financial Situation ................................................................................................................ 93 The Cluj County Council.......................................................................................................95 Legal Responsibilities & Jurisdiction ....................................................................................95 Financial Situation ................................................................................................................ 95



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General information

Project Name

“Access ways for Development in the Two Main Economic Canters of the North-West Region “

Component 1, „Primary access road to the industrial area North-West Oradea–Bors”

Component 2 „ County road connecting the agricultural areas in the Cluj county to the marketing and processing centers in Cluj Napoca

Beneficiary ORADEA LOCAL COUNCIL CLUJ COUNTY COUNCIL Financing Authority MINISTRY OF EUROPEAN INTEGRATION, ROMANIA Contracting Autority MINISTRY OF EUROPEAN INTEGRATION, ROMANIA



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Introduction

The project consists of two components, located one in the City of Oradea and the other in Cluj County, in the proximity of the city of Cluj-Napoca. Both components have the primary function of access roads for economic development, and both also serve the secondary purpose of acting temporarily, until the completion of the future beltways around the two cities, as bypass conduits for through traffic . In the case of Oradea, the project road will serve as an inner (city) ring, allowing heavy traffic coming from Bors on DN1 heading towards Cluj and Deva to bypass the city center. In the case of Cluj County, the project road will serve temporarily as a bypass diverting heavy traffic between Alba Iulia and Dej around the city of Cluj-Napoca, until the completion of the future city beltway.

The two components are:

Component 1 is a primary access road to the industrial area North-West Oradea - Bors, consisting of the rehabilitation and modernization of a 5.9 km section of three streets and of two bridges in the city of Oradea, in order to facilitate the access between residential areas with a high population density and the industrial area in the north-western section of the city of Oradea and in the suburban commune of Bors. Traffic on on the project road is currently hindered by the dilapidated condition of the existing road and the absence of modern facilities such as storm runoff drainage, proper road markings, etc. The North-West Oradea Industrial area is targeted for large scale industrial / economic development, as per the General Urban Plan of the cities of Oradea and Bors, the Local City-Planning Regulations and the Oradea Metropolitan Area Development Strategy. The Oradea North-West Industrial Area already features the Oradea Industrial Park, the Bors Industrial Park and a large number of manufacturing companies, and is expected to grow significantly over the next decade.

Component 2 is a county road 23,2 km long linking DN1 to DN1C south-east of the city of Cluj-Napoca. The project will provide access to the population living in the hilly area south of the city of Cluj-Napoca to the marketing center and other processing facilities in the city, access which currently is unavailable for some residents of the area, and possible only with large detours for others. The new road will also act temporarily, until the completion of the CLuj-Napoca Beltway in 2012, as a bypass around the city of Cluj-Napoca for the traffic between Alba Iulia and Dej, thus allowing traffic on that route to avoid entry into Cluj-Napoca on the Feleacul hill, a road whose steep gradient and hairpin curves are currently causing a large number of accidents, including fatalities, each year.

The project objectives are:

• Increasing of effectiveness in transportation system for goods and persons in Northern Western Region and it’s connections with exterior

• Supporting of economical growth and arising like a creating of new, through realizing a propitious background in order to attract foreign investments.

• Developing of county roads quality and of safety measures for traffic in order to gain an increasing of usage ratio of these.

• Reduce car traffic and air pollution level in city/town centres

Decongestion of road traffic between economical centres for development of Northern-Western Region: Cluj Napoca and Oradea

The aim of the present Feasibility Study can be stated as follows:



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To assess the present situation including the identification of current system deficiencies and present need in the two project areas

To explore alternative solutions and select the best one in terms of technical and financial efficiency

To prepare the preliminary design drawings, technical memo and associated project budget for the recommended solution

To define a financing plan To develop a practical implementation schedule



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Location

Location of Component 1, „Primary access road to the industrial area North-West Oradea–Bors”

The Oradea Metropolitan Area, which includes the city of Oradea and eight surrounding communes, is located in the depression bearing the same name, being bordered north by the Plopis Mountains and south by the Padurea Craiului Mountains. These mountain units belong to the Northern Apuseni mountain chain.

The depression area is bordered north by the Oradiei hills and south by the Tasadului hills. The Vadului depression corridor continues east, ensuring the connection towards Cluj. The Crisurilor Low Plain borders the depression west.

The Crisul Repede River crosses Oradea from South - West to North - West. The most part of the city of Oradea developed on the meadow terrace bridge and the terrace bridge on both banks of Crisul Repede River, at an altitude ranging from 110 m to 146 m. The Northern and the North - Eastern parts are located in a hilly area at an altitude ranging from 140 to 283 m.

Located almost at the same distance both from Viena and Bucharest, the city of Oradea has a geographical position that confers it access and proximity advantages. In terms of access, Oradea has a good road and railway network and a regional airport that can be modernized. The new Debrecen - Brasov highway will pass through Oradea and, starting from 2012 it will ensure quick access both westwards and towards the center of our country. Currently Oradea has a good road network ensuring the connection with Arad south (E671), Deva south - west (E79), Cluj east (E60), Satu Mare north-east (E19) and Budapesta – Debrecen west (E6o)

Please refer to drawing in Volume IV for the general layout of the project component and for the layout of specific sections.

Location of Component 2 „County road linking agricultural areas in Cluj County to marketing and processing centers in the vecinity of Cluj Napoca”

The site of Component 2 is an area of several hundred square kilometers of rural habitat situated south-east of the city of Cluj-Napoca. The specific locations of the works are:

The road sector which makes the purpose of the current study steparets from the national road DN 1 at 455+600 km and overlaps with the county road DJ 103G on 5425 ml length till Aiton village.It has a detor in the north-est direction on 8275 ml length to detor the Aiton village.After this detor the road overlaps whit the county road DJ 103 G till the Boju village entrance on a sector of stone road on 7275 ml length.After this the road detour the Boju village on a new alignment of 875 ml length untill it reach the existent alignment of the county road Dj 105S throungh Pata village on 975 ml length. The studied alignment makes a cross whit the national road DN 1C at the 8+500 km through a new alignemt of 371 ml length

A 280-meter long earth road connecting the access road to S.C. “FARMEC” CLUJ-NAPOCA DEZMIR DEPOSIT with the intersection with the railway track, respectively the national road DN 1 C.

Please refer to drawing in Volume of Drawings for the general layout of the project component and layout of specific sections.



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Scope of work

Analysis of Opportunity and Necessity for the Project (Demand) Analysis of Opportunity and Necessity for Measure 1 - „Primary access road to the industrial area North-West Oradea–Bors”

The layout of the industrial zones within the Oradea Metropolitan Area is presented in Volume Drawings. The North-West Industrial Area includes the Oradea Industrial Park, and is situated along the main Industrial Development Corridor in the Oradea Metropolitan Area, alongside DN1 between Oradea and Bors, south of the Crisul Repede River.

The South-East Industrial Area is located in the south-eastern part of the City of Oradea, north of the Crisul Repede River, between DN 76 linking Oradea to the city of Deva and DN 1 which links the city of Oradea with the city of Cluj. Please refer to charts O-28 – O30 in Volume IV – Drawings for specific detail.

Currently one of the limiting factors for the growth of the Industrial Area North-West is the difficulty that the residents of the southern and central areas of Oradea have in reaching the NW Industrial Area. As seen in Drawing O – 029, the target areas of the project are also areas with high and very high population density, which means that the project will improve transportation conditions for an estimated 30 to 35% of the people who currently work in the Industrial Area NW and attract there somewhere between 2000 and 3500 new workers. This is due to limited public transportation links between those residential areas ant the NW Industrial Area and to the poor condition of the main access road linking the residential areas with high population density in the southern part of Oradea with the industrial area North-West, which currently causes automobile traffic to be slow and halting, with numerous delays.

Public transportation (shown in detail on Drawing O – 030) reaches the Oradea Industrial Park, but the only itinerary is convoluted and the scheduled trips irregular and infrequent. There is no public transportation linking the residential areas of Oradea to the Bors Industrial Park, as can be seen in drawing O - 030 in Volume III. Along the entire corridor linking the southern part of the city of Oradea to DN1 in direction Bors, the traffic is congested nearly at all times. The main provisions in the General Urban Plan regarding road rehabilitation and modernization are presented in the Figure below. The length and itinerary of project component 1 is shown in dark blue.



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The main streets of Oradea by category of importance, according to the General Urban Plan

The recommendations of the present Feasibility Study are based on two traffic studies: the general traffic survey performed by AND-CESTRIN in 2000 and a comprehensive analysis of the traffic patterns in the city of Oradea, performed by the Search Corporation in 2001 – 2002. In order to compare existing data with current traffic patterns, the consultant had also performed a limited sampling, at points relevant to the present study, in September-October of 2004. Although the sampling performed by the consultant seems to indicate a faster growth in the Oradea traffic than forecasted by the Search study, the conclusions of the present report are based primarily on the CESTRIN and Search studies, which were performed according to Romanian norm STAS 10144/5-89.

The general conclusions of both studies are in line those resulting from the spot sampling performed by the consultant, indicating that the project road draws significant heavy through traffic, as well as significant local traffic - especially at peak hours - in excess of the nominal capacity of the road..

The traffic study performed in 2002 by the highly reputable Search Corporation research company, has indicated that throughout the Municipality of Oradea, the overall street capacity is exceeded by the current levels of automotive traffic.

Along the project route Drumul Podului – Str. Densuseanu, road traffic in all categories exceeds capacity. The ratio of traffic flow to capacity, in rush hour traffic, reached 1.07 on Podului Street in 2002. The most crowded section was O. Densuseanu Street, where rush hour traffic could at the time exceed capacity by a ratio of up to 1.84 / 1 as seen in table below.



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Current and forecasted traffic on project Component 1 road in the city of Oradea 2001 2015

Existing Situation Traffic flow forecast Current

Maximum Capacity Total Vehicles Total Vehicles Street Name

HTC ADT DTMax HTMa

x

Traffic flow/capacity Ratio

ADT DTMax HTMax

Traffic flow/capacity Ratio

Podului Street 1360 11110 16144 1453 1.07 20577 31490 2834 2.08 Ovid Densuseanu

Street 1350 18355 27619 2486 1.84 30582 54802 4932 3.65

Calea Santandrei 1200 10972 19331 1740 1.45 22327 38743 3487 2.91

Further spot sampling performed by the Consultant at the same node have yielded hourly average (TOC) values in the range 700 to 1100 on weekdays at peak hours (lunchtime to 6 pm), values not far below those forecasted by Search Co. for 2015. Practically traffic was almost continuously saturated during peak hours throughout the sampling.

As it turns out, heavy traffic represents some 18% of all traffic at this node. Although larger vehicles tend to move and turn slower and could slow down the traffic, it is not the heavy trucks that bog down the traffic, but rather the poor condition of the road that slows down the traffic flow, as all vehicles slow down significantly at large cracks, potholes etc. The consultant also estimates that the automotive commuter traffic (local residents heading to and from work on the project road) make up to 65%-70% of traffic at rush hour.

Much of the commuter traffic on the project road is linking the south-west residential areas with high population density with the industrial area NW via DN1, namely the route O. Densuseanu – Str. Podului.

The information presented has however been interpreted statistically and through inference (based on assumptions made by experts knowledgeable of the local conditions) by the consultant; there has been no O/D (origin/destination) study available to confirm the percentages of the traffic flow related to through and commuter traffic.

In any event, the current traffic overload can only be expected to worsen as the number of locally-owned vehicles increases. As per the same Search study, two scenarios were developed for car ownership in the city of Oradea. At the time of the completion of the Search study, vehicle ownership in Oradea was around 200 vehicles per thousand inhabitants.



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Vehicle ownership in the city of Oradea, per thousand inhabitants

The figure is expected to reach 250 shortly after 2005 and to nearly double by 2020.

The General Urban Plan (PUG) of Oradea envisions the construction of a beltway that will take over the heavy traffic, between 2008 and 2010, thus decongesting the existing city roads. The proposed (as per PUG-PUZ) itinerary for the beltway system of the city of Oradea is shown in Volume VI. This however is a separate problem from the one addressed by the present project, namely the improvement of the local traffic flow between the south-east, vest and central residential areas and the Industrial Area North-West. For the purposes of the present study and based on existing data the consultant estimates that the completion of the Oradea – Brasov freeway and the concomitant completion of the Oradea Beltway will together only relieve no more than 30% of the traffic along the project road (Calea Santandrei, Str Densuseanu, Str. Podului). As the traffic will at the time exceed this route’s capacity by between 70% and 100%, this shows that the opportunity and necessity of the works proposed will not be materially impacted when much (or all) of the through traffic is diverted to the freeway. The proposed works are and will still be necessary for the local commuter traffic.

Measure 1 of the project, -„Primary access road to the industrial area North-West Oradea – Bors”, addresses this need by rehabilitating and modernizing a 5,9 km section of main access road between the south-west residential areas with high population density and the North-West industrial area.

Last, but not of least importance, current traffic conditions on the project road are a substantial part of the cause for an average of 15 accidents involving fatalities per year, as per Memo Nr. 151986/30.11.2004 issued by the Oradea Traffic Police Bureau. The figure indicated for the road sections included in the project is 30 accidents involving fatalities over 2 years, 2003 – 2004. Expert opinion indicates that most accidents are caused by automobiles attempting to pass, under the wrong circumstances, larger vehicles which have to slow down excessively due to the degraded road surface.



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Analysis of Opportunity and Necessity for Measure 2 - „County road linking agricultural areas in Cluj County to marketing and processing centers in the City of Cluj Napoca”

The investment background and justification

Cluj County is located in the heart of the historical province of Transylvania, in the central Western region of Romania; its neighboring counties are Bihor, Salaj, Maramures, Alba, Bistrita-Nasaud, and Mures. Its surface is of 6.674 km2 (2.8% of the surface of Romania). Geographically, it is located between 47°28’44” parallel to the North, 46°24’47” parallel to the South, 23°38’22” meridian to the West, and 24°13’46” meridian to the East, respectively. It lies in the Northwestern half of Romania, at the meeting point of three representative natural units: Apuseni Mountains, Somes Plateau, and Transylvanian Plain; it is a hilly area (two thirds of its surface is covered by hills), and its plains are at an altitude higher than 200 m. Its most representative height points are: Vladeasa Mountain (1842 m) and Muntele Mare (1826 m), and its lowest altitude is registered at the point where Somes river leaves the county – 227 m.

Cluj county’s economy has been based upon rich material resources, the beneficial geographic position, leading to easy rail and road communication ways, important reserves of highly qualified workforce, traditionally skilled in numerous fields, highly adaptable to the requirements of a competitive market, due to the powerful all-level educational centers, and to the scientific research and technological development centers in the area.

The heterogeneity of the natural environment, which is remarkable by a picturesque scenery, historical traces reminiscing of certain moments in our country’s past, numerous artistic monuments, and original ethnographic and folkloric elements, makes of Cluj county territory a very attractive economic and tourist center, both nationally and internationally.

Within the range of economic activities, the main place is occupied by the processing industry in whose framework most national branches are represented. The different industrial fields employ over 25.1% of the working population.

The specific soil and climate conditions have also favored agricultural development – the second most important branch of the county’s economy; livestock breeding plays an important part.

On the sloping fields numerous valuable orchards have been created, especially in the central, Northern and North-Eastern regions of the county, on the hills around Cluj City, Baciu, Apahida, Dej, Casei, Citcau, Mica, etc.

The construction materials existing in their natural state and resulting from industrial processing have favored the development of an important constructions field.

The stock of wood, including forests that cover a surface of 170.238 hectares (25.5% of the county surface), has been directly connected to the development of many economic fields, especially industry and constructions.

It is also important to mention the rich and varied tourist potential, especially that of Apuseni Mountains, which has real opportunities for developing activities in this field, within the restructuring and privatizing process of the county’s economy.

The tourist potential is reflected by the extremely favorable conditions offered by the varied range of possible activities: hiking, mountaineering, car tourism, winter and summer sports, short-term and long-term leisure, children and youth camps, spas, etc.



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Cluj is the second largest Romanian financial and banking center, and one of the country’s most developed counties. Its economic potential is equally determined by the local resources, by the great number and diversity of economic agents, by the favorable geographic position, and by the tradition and experience in most activity fields. The county’s characteristics as an administrative-territorial unit of Romania are as follows: the existence of a powerful industrial potential of processing both the county’s resources and the attracted resources; the higher contribution of the livestock breeding field to the total agricultural production; the contribution to the promotion of technical progress brought about by the great number of scientific research units; the great number of all-grade educational institutions, which ensures the population’s training in a wide range of professions; the rich prestigious cultural-artistic activity; great opportunities for using a varied artistic potential; its location at the crossroads of the most important road and rail communication ways that ensure direct connections to every region of the country.

The area around the proposed road, shown on drawings in Volume IV, is a hilly rural area where the predominant activity is subsistence agriculture. Economic activity is scarce (cca. 1.3 million EUR in reported revenue over an area of several hundred square kilometers, with 16 villages). Until recently, the villagers living in the area had no opportunity to access any modern produce collection and distribution facilities, as none were located nearby and private entrepreneurs had not initiated any sort of modern logistics / collection / warehousing due primarily to poor transportation infrastructure and lack of opportunity.

The situation has changed significantly with the construction in 2002 – 2003 of the new marketing center at Apahida, located just outside Cluj-Napoca on DN1C. The marketing center has offered the local farmers a central warehouse and exchange to sell their produce at efficiently. The problem that remains however for many local farmers (particularly for those who live South and South-West of the village of Boju, where the dirt road communal road, impracticable in bad weather, is located), is transportation, lack of a paved road that dissuades many villagers from even attempting to transport their produce to the new marketing center in Apahida.

The other main purpose of the project, of temporary but highly important effect, is the possibility of diverting some of the heavy traffic that currently comes north on DN1, entering the city of Cluj-Napoca through the dangerously steep-sloped Feleacu Commune to exit the city and head towards Dej on DN1C, from entering the city at all. The proposed road could provide a temporary bypass road thus relieving the city of Cluj-Napoca of some of its heavy traffic until the Oradea – Cluj freeway and the future system of beltway and bypass roads around Cluj-Napoca (Drawing in Volume IV) will be completed in 2012.

The section of DN1C entering Cluj-Napoca over the Feleacul hill is, due to the steep gradient and tight, hairpin-curves, a major cause of accidents and traffic bottle-necks. Table 3.11 below shows the bumber of accidents on Feleacul Hill over the last three years.

Traffic accidents on DN1 over Feleacul Hill in Cluj-Napoca Year Number of Accidents Number of Fatalities Number of Wounded

2002 3 5 2003 10 7 18 2004 9 4 6 Total 22 11 29

How many of these accidents involved vehicles in transit, is not known. However, knowledgeable sources place the through traffic entering Cluj-Napoca on Felacul hill at 70% of the traffic, about half of which will proceed in the direction of Dej. This leads to a rough estimate of cca. 1/3rd of the accidents being avoidable by means of using the detour provided by the project road.



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All these factors determine a transit and local traffic that reaches high values on all Cluj county roads. The traffic values registered in 2000 on the national roads that cross the municipal city range from 3.501 to 16.000 physical vehicles – MZA; these values grades the traffic into the MEDIUM/HEAVY category for which Two/four-lane roads are recommended.

Road name MZA traffic 2000

MZA traffic 2010

MZA traffic 2020

Traffic Technical Class 2000

Technical Class 2010

DN1 (Entry) 11,072 18,426 24,995 HEAVY II I DN1 (Exit) 8,157 13,456 18,242 HEAVY II I DN 1 C 10,788 17,872 24,211 HEAVY II I DN 1 F 4,955 8,188 11,081 MEDIUM III II

In terms of traffic density, the only data available for the present study was the CESTRIN survey and forecast of 2000 shown in Table below. The CESTRIN study shows traffic figures in the area adjacent to the city of Cluj-Napoca are high for both DN1 and DN1C, indicating TDA’s (total daily averages)of between 5 and 10 thousand standard vehicles on the relevant sections of both national roads for 2005.

CESTRIN study of DN1 and DN1C on the sections between the ends of the project road and the city of Cluj-Napoca - survey & forecast

DN Between km And km ADT 2000

ADT 2005ADT 2010

ADT 2015

ADT 2020

1 449+600 437+600 11072 14218 18247 22683 24995 1 481+500 492+860 8157 10413 13457 16541 18243 1 492+860 514+000 4655 5948 7692 9454 10443 1 514+000 527+000 5024 6408 8285 10177 11232 1 527+000 549+000 4526 5746 7401 9088 10079 1 549+000 564+000 3935 4992 6441 7893 8721 1C 8+300 13+200 10788 13818 17874 21984 24211 1C 13+200 30+250 6553 8408 10878 13393 14768 1C 30+250 43+000 7064 8936 11505 14085 15493 1C 46+500 56+500 5578 7125 9203 11313 12476

This is consistent with the consultant’s own spot sampling in the fall of 2004 (12 samples over a period of 2 weeks), which average over 10 thousand standard vehicles per working day.

Traffic spot sampling on DN1 (Cluj-Napoca – Dej), by types of vehicles and hours

Hours two-

wheel vehicles

cars tractor trailers

three- and four-

axle trucks

articulated trucks

buses / coaches

farm vehicles

irregular /

oversize

horse wagons

6 - 7 1 206 26 8 3 18 1 1 0

7 - 8 3 417 66 11 1 14 0 1 0

8 - 9 0 555 86 18 1 20 0 17 0

9 - 10 1 580 93 18 5 11 4 17 1

10 - 11 1 594 94 9 8 14 0 25 1

11 - 12 4 618 100 11 11 12 1 21 0

12 - 13 0 545 106 5 5 16 1 18 0



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13 - 14 3 556 98 7 9 17 1 21 0

14 - 15 2 585 101 6 6 21 1 20 1

2 556 96 5 12 20 1 22 1

16 - 17 0 512 86 6 8 18 0 24 1

17 - 18 2 448 93 4 8 14 2 21 1

18 - 19 5 423 81 4 5 8 0 11 0

19 - 20 1 322 52 3 4 14 1 20 0

20 - 21 1 275 47 6 5 12 0 16 0

21 - 22 0 213 34 2 2 9 0 13 0

TOTAL 26 7405 1259 123 93 238 13 268 6

Traffic spot sampling on DN1C (Cluj-Napoca –Turda), by types of vehicles and hours

Hours two-

wheel vehicles

cars tractor trailers

three- and four-

axle trucks

articulated trucks

buses / coaches

farm vehicles

irregular /

oversize

horse wagons

6 - 7 1 192 24 1 2 16 1 6 0

7 - 8 3 397 73 4 6 12 1 19 1

8 - 9 0 643 96 14 5 15 1 16 0

9 - 10 1 531 135 14 9 9 2 26 0

10 - 11 1 646 120 10 6 13 1 28 5

11 - 12 2 482 126 12 3 9 2 16 0

12 - 13 7 519 135 10 4 14 1 19 3

13 - 14 4 519 130 7 3 13 0 21 0

14 - 15 3 507 124 6 6 14 2 19 0

15 - 16 0 538 88 9 7 24 4 29 0

16 - 17 1 506 95 11 6 19 0 25 0

17 - 18 5 469 93 6 2 17 2 24 0

18 - 19 10 416 93 7 12 12 0 16 0

19 - 20 7 284 45 2 5 12 0 9 0

20 - 21 2 226 39 4 8 11 0 12 0

21 - 22 0 193 31 3 6 8 0 7 0

TOTAL 47 7068 1447 120 90 218 17 292 9

Of the 5 to over 10 thousand standard vehicles that make the total daily average, heavy traffic represents 22% of all traffic. The consultant estimates that through traffic represents on the average 70% of all traffic on DN1 and DN1C. Given the traffic patterns in the area, it appears likely that 25% to 30% of through traffic would use the project road to bypass the city of Cluj-Napoca until the future beltways of the city will be constructed. Based on the same model, the coming on line of the new Oradea-Brasov freeway can be expected to divert 50% to 70% of the traffic on DN1.

Currently the transit traffic crosses the municipality, as there is no available detour route for the transit traffic. We have to specify that the city streets are very narrow; they have high longitudinal slopes, narrow crossroads without visibility, narrow curves, etc. To these inconveniences we can add the highly dangerous route in Cluj area, that of Feleac Hill on DN 1, which is also the heaviest traffic route and represents a dangerous and high-risk point for all traffic participants.



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These factors determine very difficult traffic conditions, the degradation and wear of the existing road system due to the overtaxing of heavy traffic, an increase in the number of accidents, the significant environment pollution of the city area, an increase in vibrations with a negative impact on constructions (determining cracks, crannies etc.). The increase of traffic and road traffic safety require the removing of dangerous points in this section by building a detour road connecting the national, county, and local roads, and will lead to:

o an increase in traffic capacity by improving traffic flow; o city traffic decongestion; o obtaining comfort for traffic participants; o an increase in traffic safety; o a decrease of the number of accidents; o city environment improvement by reducing gas and noise pollution.

The project road will provide, improve or facilitate access to the new Marketing Center at Apahida to farmers living on an area of several hundred kilometers, the second component will benefit over 4.000 agricultural producers living in the hilly area south of the city of Cluj-Napoca. This will improve the standard of living in a large peri-urban area, with positive effects on social cohesion and local economic development. Transportation infrastructure will also allow some residents of the peri-urban area to seek jobs at the industrial area and Industrial Park on the West side of Cluj-Napoca.

Positive impact consistent with the main objectives include:

o having safe and comfortable traffic; o increasing the lifespan of the existing road system; o increasing the traffic capacity by improving traffic flow; o city traffic decongestion; o improving the environment by reducing gas and noise pollution and vibrations; o decreasing the degradation of existing constructions; o decreasing the number of accidents by avoiding the most dangerous transit route in Cluj-Napoca

City – Feleac hill – and increasing traffic safety; o improving living and working conditions in the villages neighboring the new road section for traffic

decongestion; o increasing the social-economic level by encouraging people to stay in this area; o exploiting the tourist potential.

By building the suggested detour route, a first stage of the so-called “Cluj-Napoca City Detouring Ring” is accomplished. This “ring” will take over a significant percentage of the entire transit traffic:

o 100% on the directions Brasov/Turda – Dej/Baia Mare/Bistrita; o 100% on the directions Brasov/Turda – Zalau/Satu Mare; o approximately 37% of the county transit traffic, which currently crosses the entire Cluj-Napoca City

on different city routes.

This objective does not involve transport networks for other utilities, such as: water, sewerage, gas, heat, or electricity.



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Technical Report

Land Ownership and Land Management The two objectives belong to the public realm as follows: The main access road to the N-W industrial area Oradea – Bors is located inside the city of Oradea, the proposed works complying with the local General Urban Plan. The land belongs to the public realm of the city of Ordea, as set forth by the Government Decision 970/2002 regarding the public realm certification of the Bihor county and the cities, towns and communes of the Bihor county as follows:

o Santandrei Street 1,425 m o Podului I Street 1,810 m o Podului II Street 920 m o Ovid Densuseanu Street 2,250 m

County road connecting the agricultural areas in the Cluj county to the marketing and processing centers in the city of Cluj Napoca The work will have a total length of 23.200 linear meters within and outside the built-up area of Ceanu Mic, Aiton, Boju, Pata, Dezmir, and Cluj-Napoca City. The designed route partially overlaps the existing route to a length of approximately 13.975 linear meters, with small adjustments needed in order to comply with STAS 863/85 regarding geometric road elements, and with current regulations. The new route will be approximately 9.521 linear meters in length. The total built surface will be of approximately 348.000 m2. Component 1 -„Primary access road to the industrial area North-West Oradea – Bors”

Component 1 consists of the rehabilitation and modernization of a one of the main access ways connecting largely residential areas in the south-western part of the city of Oradea with the section of DN1 that further links the residential zone with the industrial area NW, and with the Oradea and Bors Insustrial Parks. The starting point of the project compoenent is at the intersection Podului St. with Stefan cel Mare Bvd.. The road goes along the streets Podului, Densuseanu and Calea Santandrei up to the existing level intersection with DN 79 (Oradea – Arad). The total length of the proposed route is 5.97 km, of which: 1.760 km on Podului St., 2.940 km on Densuseanu St., 1.270 km on Calea Santandrei. The proposed works are within the frame of the General Urban Planning of the city of Oradea.

Existing situation

The streets Podului, O. Densuseanu and Calea Santandrei have an un-rigid road system, made of ballast foundations, macadam ground layer with two layers of asphalt laid on top. The road system of the roads was not dimensioned for the loads of the currents and future heavy traffic, which is why the road system has been strongly damaged.

Podului Street has a street profile; the collection and evacuation of the storm runoff is solved by the outflows connected to the main collector of 80/120 mm in the area. The number of outflows is insufficient and the existing ones are clogged because of the lack of maintenance works.

Densuseanu Street has a road profile, with no storm runoff collection and evacuation system, both because of the inexistence of a storm water collector and the impossibility of constructing collecting ditches because of the land structure on most part of the route. The section between the crossroads with H. Ibsen and the



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bridge over Peta creek has a storm runoff collection system. In this area, the ditches are partially clogged because of the lack of maintenance works.

On Calea Santandrei, approx. 5% of the road area features undulations. The collection of storm runoff is made through drainage ditches which discharge into Peta creek through drain channels.

The main artworks on the analyzed route are as follows:

Overpass on Dacia Bvd. Road bridge over Crisul Repede River Tubular culverts Road bridge over the Peta creek on O. Densuseanu Street

Overpass on Dacia Bvd

The crossroads between Podului Street and Dacia Blvd. is followed by a 4-opening uneven passage, with a total length of 54.20 m. The total width of the passage is 16.25 m, with a roadbed of 12.80 m. The roadway is insufficient for large size vehicles. The experts’ report destined to the objective rehabilitation shows the following:

the joints of the strips show signs of infiltrations on all openings the expansion joints are damaged the mortar between the joints between the strips does no longer exist the asphalt on the sidewalks is damaged and is missing in some areas the directional bulwark is missing the access stairway concrete is damaged

The interchanges included in the above mentioned traffic junction are highly damaged

Road bridge over the Crisul Repede river

The bridge is 4 x 30-meter long and 10.80-meter wide. The bridge superstructure is made up of manufactured pre-compressed beams. Infrastructure: suspended foundations.

The bridge over the Crisul Repede River has some severely damaged pavement on the extension joints.

Tubular culverts

On O. Densuseanu Street, there is a tubular culvert next to H.Ibsen street, located under the level track crossing platform with the railway Oradea-Arad. The level of this tubular culvert raft does not allow for the complete collection of storm runoff in the ditch. On Calea Sintandrei (DJ.797) route, there are 3 partly clogged tubular culverts.

Road bridges over the Peta creek on Densuseanu street

On Densuseanu Street, at km 4+200, there is a bridge 12.0-meter long and 12.0-meter wide, the roadway and the bed reinforcement work being damaged. The sidewalks are damaged.



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Geotechnical Study

In terms of morphology, several units may be distinguished within the city. The geotechnical setting conditions in the city of Oradea differ as to the morphologic unit on which it is located, unit characterized by a specific lithological composition. In terms of morphology the proposed works are located in the medium terrace of the Crisul Repede River. The average altitude of this terrace ranges between 120 – 140 m. Typical for this area is that at a depth of maximum 3 m, there are different kinds of fills, generally consolidated, rarely unconsolidated. For a visual reference, please refer to drawing in Volume IV.

Under these fills, there are visually strong or visually thick brown dusty clay layers, for which a 150 – 200 kPa rated pressure may be considered. Under this clay, both in the terrace area and in the sediment-covered area, there are coarse alluvial terrace deposits (gravels, blocks, sands) for which a maximum 400 kPa rated pressure may be considered.

The hydrostatic level is noticed at different depths; in some sectors, the water level is between 1.80 – 2.90 m, and some other times it is minimum 2.5-meter deep (Calea Santandrei).

The E calculation seismic area and the corner period Tc=0.7 sec and the seismic coefficient KS=0.12, according to the prescriptions of the Normative Act P 100/92.

The foundation land research was made by executing 6 drillings of geological prospecting. The land courses are presented in the geological profiles.

The geotechnical features of the lands were determined using samples taken from the land, the results being recorded in the centralizing sheet.

The granularity determination emphasizes the predominance of clay and dust fractions. The granulometric fraction as per STAS STAS 1913 / 12 / 88 shows the inclusion on the PUCM, while the contractile activity is average and active.

The land has a good natural stability.

Two prospecting drillings were executed on Calea Santandrei.

Drilling no. 1

The land courses are as follows: under the road courses down to -1.30 m, there is solid plastic brown clay, with Ip = 29, while under this depth down to -3.80 m there is compact dusty clay.

Drilling no. 2

The land courses are as follows: under the road courses down to -1.90 m there is solid plastic dusty brown clay, with Ip = 30, while under this depth down to -3.40 m there is solid plastic compact dusty clay.

Two prospecting drillings were executed on Ov. Densusean Street.



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Drilling no. 3

The land courses are as follows: under the road courses down to -0.60 m there is compact sandy clay, with Ip = 36. Between -0.60 m and -1.40 m there is dusty clay, while under this depth down to -2.49 m there is sandy dust.

Drilling no. 4

The land courses are as follows: under the road courses down to -1.30 m, there is gray clay dust, with Ip = 23, while under this depth down to -2.30 m there is dusty sand.

Two prospecting drillings were executed on Podului Street.

Drilling no. 5

The land courses are as follows: under the road courses down to -1.20 m there are fills mixed with clay, with Ip = 30.7, while under this depth down to -3.60 m there is dusty brown clay.

Drilling no. 6

The land courses are as follows: under the road courses down to -4.20 m there is solid plastic brown clay, with Ip = 41.7, while under this depth down to -5.60 m there is solid plastic dusty brown clay.

Proposed Solution – Presentation of Works

Works proposed for Podului Street

Rehabilitation of the street profile road system, with irregular kerbs; Road widening 1.75m each side to bring the pavement to 10.50 m; Drainage of the storm waters placing outflows connected to the existing sewage system; Construction of a sidewalk between the street and the railway embankment; Planting trees and hedges as a protection curtain on the residential side; Widening and reinforcing the over ground passage on Dacia Bvd.; Rehabilitation of the interchanges which make the traffic junction with Dacia Bvd.; Remarking the descending interchange on Arad-Bors road in order to improve the rotation radius

from 18.0 to 26.0 m. Works proposed for the sector between the road bridge over the Crisul Repede river and Mestesugarilor street

Remaking the expansion joints on the bridge supports; Rehabilitation of the street profile road system; Road widening 1.75m each side to bring the pavement to 10.50 m; Drainage of the storm waters placing outflows connected to the new storm sewage network, with

drainage into the Crisul Repede River; Building a sidewalk towards the railway embankment Planting trees and hedges a protection curtain on the residential side, on the sector between

Cazaban Street and Mestesugarilor Street Relocating the heat carrier pipeline supplying two heating units in the Iosia residential area – the

existing aerial pipeline will be placed underground In order to regulate the traffic flow and increase the traffic safety, addition of street-traffic control

islands, left turn lanes and traffic lights will improve the crossroads between Densuseanu Street and the streets Cazaban and Mestesugarilor.



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Works proposed for the sector between Mestesugarilor Street and Darabant street

Rebuilding the road system on a site relocated against the current road centerline, by moving it off with 4.0 – 5.0 m against the built front, with street profile and lowering the red line with 80.0 – 90.0 cm against the current level. The pavement roadway was moved away from the apartment blocks in order to reduce the pollution caused by the traffic and to ensure the necessary space for placing a protection belt. The lowering of the red line level was imposed by vertical systematization reasons;

Building a retaining wall towards the railway and a sidewalk; Putting out of use the industrial railway crossing next to Ep. Ig. Darabant Street; Lowering the industrial railway crossing towards Barcaului Street at the designed level of the

street; Building a storm sewer, located between the street and the railway, intended to catch the storm

waters, both on O. Densuseanu Street and on the side streets.

Works proposed for the sector between Darabant street and Calea Santandrei

Rehabilitation of the road system by building a road profile similar to the one executed in Phase 1 The storm waters on the roadway will be drained into ditches caught by the Peta creek; The storm waters on Ibsen Street will be drained into the designed ditches through tubular

culverts; In order to regulate the traffic flow and increase the traffic safety, the crossroads between

Densuseanu Street and Ibsen Street will be provided with a street-traffic control island and traffic lights.

The bridge over Peta creek will be widened in order to ensure a 7.80-meter wide pavement, two 1.50-meter wide sidewalks, separated from the roadway with metal slides

Remaking the expansion joints on the bridge supports over the Peta creek

Works proposed for the sector Calea Santandrei

Rehabilitation of the road system by building a road cross-section in order to ensure a 8.50-meter width for the pavement, it is necessary to expand the existing pavement towards the Peta creek with a 2.50-m width.

The widening of the pavement requires cutting the existing trees, with no economical value, on the whole left length of the road. After completing the works, rare tree species will be planted along the road (nut trees, lime trees, etc.).

In order to ensure nocturnal visibility, public lighting works will be executed, leading to a higher traffic safety and increased comfort on the entire analyzed route.

In order to ensure the traffic safety on the entire section, longitudinal and transversal reflective markings will be executed and reflective-sheeting road signs, especially guiding panels will be added to the signaling system.

Main features of the proposed construction works

The Access Road

The total length of the access road is 5,9 km; The road is included into the third technical class, “C” category, with a 80.00 km/h design speed,

typical for flatland areas. The width of the road platform is 11.00 m in the road profile area and 10.00 m in the street

profile area;



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The width of the pavement will be 7.00 m, for two traffic lanes of 3.50 m each. On the road profile area, 2 shoulder lanes of 0.75-meter wide each are added to the pavement.

The vertical clearance condition for aerial installations, vertically measured in the road center line is minimum 5.00 m.

The road system will be designed for heavy traffic; The road is of local interest exclusively, as a conduit primarily for local commuter and business

traffic and only secondarily for through traffic.

Other Civil Engineering Works

Overpass Dacia Bvd.

The geometrical characteristics of the overpass after consolidation and widening will be:

o width of the pavement: 4 m o width of the sidewalks: 1.50 m

However, upon the recommendation of the TA Consultant, the Planet Company, the authors of the present study have also explored the possibility of enlarging the current bridge to a width of 10,5 m, a solution the consultant has found to be impossible to implement (cannot obtain construction permit) under current Romanian law, as it does not comply to existing norm STAS 2924-91. The alternative possible under current Romanian law would be to extend the bridge to four lanes (14 m width); the drawings for this solution are presented in Volume IV – Drawings; the technical description is presented below:

According to STAS 2924-91, i.e. “Manadatory size limits for road bridges”, those bridges located on national or county roads should have a specific structure along the sections crossing a locality, as follows: a 14.00-meter wide pavement, accommodating four traffic lanes, two widths E0=0.40 m representing the additional width due to the optical narrowing effect and two 1.50-meter wide sidewalks, including the necessary space for erecting the safety walls, Sp=0.50 m.

In order to extend the road to four traffic lanes it is necessary to add three more beams, sectioned and pre-cast, of 30-meter width and 1.8-meter height, two beams upstream and one downstream, at a distance of 2.7 m between them. The extension of the road is asymmetrical, 4.85 m upstream and 2.15 m downstream, which leads to the movement of the road bridge centerline with 1.35 m upstream.

The road bridge shall be dimensioned according to E loading class, trains A30, V80.

Superstructure:

The main beams are made of pre-cast reinforced concrete, of 30-meter length and 1.80-meter height, sectioned, monolithised and pre-cast on the construction premises. The beams will be simply leant against metal support devices, like the former superstructure, and will be connected transversally to the existing road through the pavement and the transverse girders.

The pavement comprised between the beams and the sidewalk console shall be made of reinforced concrete class C 25/30.

The transverse girders which are supposed to interconnect transversally the main beams and also connect the beams with the former road pavement shall be made of reinforced concrete and shall be pre-cast.



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Reinforced concrete bushes shall be installed on the elevations of the expanded abutments and pillars, and the metal support devices, fixed and mobile, shall be placed on these bushes.

The bridge road shall be made of gradient concrete, to be laid over the beams, and shall have longitudinal and transversal gradients of 2%, necessary for ensuring the rainwater evacuation and shall be made of high-quality water-proof insulating material, water-proof insulation protection (in case the water-proof insulation does not have its own protection), a connection layer and a wear-off layer made of asphalt concrete or hard cast concrete.

Evacuation of rainwater storm-off shall be made through sewers located near the sidewalk kerbs, at each bottom of the bridge.

The sidewalks, 1.5-meter wide, shall be unequally leveled. The bridge road shall be made of gradient concrete, water-proof insulation with protection, concrete made of filling concrete class C 12/15 and a wear-off layer of BA8. PVC pipes shall be incorporated within the filling concrete, necessary for crossing the networks. The existing lighting poles shall be reinstalled on the newly constructed sidewalks.

The sidewalks shall be bordered by the metal pedestrian fence and the safety protection heavy wall.

Infrastructure:

The bridge infrastructure is represented by three lamellar pillars made of reinforced concrete and two reinforced concrete abutments, all of them being founded on columns type Benotto F108, 13-14-meters long.

Expansion of the pillars shall be performed by adding three more Benotto columns, located under the new beams (similar to the existing layout), and the reinforced concrete elevation shall be achieved over these columns. The new elevations shall be connected to the existing ones by anchors and by lining.

Small bridges providing access to individual dwellings (over channels)

At the bottoms of the bridge there are two small bridges over channels, whose route is parallel to Crisul Repede River

On the left river bank, there is a bridge with superstructure made of pre-stressed beam with hollow section, 5.60-meter long (beams’ code 52-6), supported directly on heavy abutments made of concrete, with direct foundation.

On the right river bank, there is a bridge with superstructure made of pre-stressed beam with hollow section, 9.60-meter long (beams’ code 52-10), supported directly on heavy abutments made of concrete, with direct foundation.

Both bridges shall be enlarged to four traffic lanes. The expansion of the road pavement shall be made by adding beams of similar type (pre-stressed beam with hollow section 52-6, respectively 52-10), or beams with adherent strings. A reinforced concrete slate shall be placed over these beams, class C 25/30, which will provide the transversal distribution of loads and will ensure the rainwater evacuation through longitudinal and transversal gradients.

The bridge roads and the protection walls will be of a similar type with the bridge over Crisul Repede River.



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The abutments shall be expanded and connected to the existing ones by anchors and by lining.

Both bridges shall be dimensioned according to E-loading class, trains A30, V80.

This solution is possible to implement but is also expensive and would not make much sense as long as the projected road width is 10,5 m (two lanes and shoulder). The Municipality of Oradea has included in its long-term planning for municipal infrastructure development the enlargement of the bridge at a later time.

• Bridge over Peta creek – L = 12.00 m, B = 7.80 + 2 x 1.50

Infrastructure of elements manufactured with coherent reinforcement.

Directly founded single-piece infrastructures.

Calculation range E class (A 30, V 80).

Tubular culverts Dn 39.37 in, L = 12.0 m, 5 pcs. Tubular culverts Dn 39.37 in, L = 27.34 yd, 1 pcs. Tubular culverts Dn 500 mm, L = 12.0 m, 2 pcs.

Storm Runoff

The following works have been proposed for the processing and the evacuation of the storm waters from the traffic way:

Sewerage networks in Podului Street: 64 outflows and a total of 704.00 m for their connections to the existing sewerage main pipeline Sewerage networks in O. Densuseanu Street: storm water main collector Dn 23.62 in L = 35.50 fl oz storm water main collector Dn 800 mm L = 1,550 m 95 outflows and a total of 720 m for their connections to the proposed sewerage main collector

The sewerage networks will be made of polyester tubes reinforced with glass fibre and sand insertion for diameters of over 300 mm and PVC tubes for the pipelines with Dn 300 mm. The pipelines will be laid in dug trenches.

Construction Structure

Roads

Starting from the crossroads with Stefan cel Mare Bvd., Podului Street will be reinforced by adding 3 asphalt mixtures courses, as follows:

4 cm medium thick binder regulating course 6 cm thick open asphalt concrete binder 4 cm asphalt concrete pavement 20 x 25 cm (concrete-made) irregular-kerb bordering

The road enlargement boxes will have the following structure:

15 cm thick superficial course made up of quarry waste products



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25 cm thick ballast foundation 25 cm thick 5% stable ballast foundation 10 cm thick wet tarry ground course 6 cm thick open asphalt concrete binder 4 cm thick asphalt concrete pavement 20x25 cm irregular kerbed bordering

On the right side of the road section on Podului Street, a 1.00-meter wide sidewalk will be executed with cement concrete pavement.

The traffic junction interchanges in the overpass area involve demolition and kerb installation work and reinforcement works by adding 3 pavement mixture courses, as follows:

4 cm medium thick binder regulating course open asphalt concrete binder 4 cm asphalt concrete pavement 20x25 cm irregular-kerb bordering

On O. Densuseanu Street, the road structure will be entirely replaced by a new one, with a thickness of 85 cm, which resists to heavy traffic, as follows:

15 cm thick superficial course made up of quarry waste products 25 cm thick ballast foundation 25 cm thick 5% stable ballast foundation 10 cm thick wet tarry ground course 6 cm thick open asphalt concrete binder 4 cm thick asphalt concrete pavement 20x25 cm irregular kerbed bordering

On both sides of the road section on Podului Street, 1.00-meter wide sidewalks will be executed with cement concrete pavement.

The car parking lot will be made on a 25 cm thick ballast foundation and 15 cm cement concrete pavement. The TIR parking lot will be made up of a 35 cm thick ballast foundation and 20 cm cement concrete pavement.

On the section Densuseanu Street with a road profile (from the crossroads of ep. lg. Darabant Street with Calea Sintandrei) the proposed works consist of:

reinforcing and widening the roadway from 6.0 m to 8.50 m

On Densuseanu Street, the road widening and reinforcing will be made symmetrically, on both sides, keeping the current road center line.

The stiffening courses are:

12 cm thick wet tarry ground course 6.0 cm thick open asphalt concrete binder 4 cm thick asphalt concrete pavement



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For widening purposes, the solution of a new road structure, 85 cm thick, is adopted as follows:

15 cm thick superficial course made up of quarry waste products 25 cm thick ballast foundation 25 cm thick 5% stable ballast foundation 10 cm thick wet tarry ground course 6 cm thick open asphalt concrete binder 4 cm thick asphalt concrete pavement

On Calea Sintandrei the existing road will be asymmetrically widened (towards Peta creek) and the existing road system will be stiffened.

the stiffening will be made by adding the following courses:

o thick wet tarry ground course having a variable thickness (min. 10 cm thickness) o 6 cm thick open asphalt concrete binder o 4 cm thick wearing course of asphalt concrete pavement

For widening purposes and for the swelled areas, a new road structure, 85 cm thick, is adopted with the above-mentioned courses.

Bridges

The road bridge over the Crisul Repede river as well as the bridges over the Peta creek require the replacement of the existing damaged joints, with sealed, expansion joints covering devices, with elastic band and metal profiles.

The bridges over Peta creek require the refurbishment of the superstructure part, consisting of:

remaking of the road pavement (waterproofing works, concrete guard plate) refurbishment of the sidewalks by the reconstruction of the kerb, slide, bulwarks and way arrangement of the stream bed by consolidation works on the raw stone bed stream The tubular culverts shall be made of PREMO tubes, with intake shafts

Storm Runoff

The following works have been proposed for the collection and the evacuation of the storm runoff from the road pavement:

The sewerage networks will be made of polyester tubes reinforced with glass fibre and sand insertion for diameters over 300 mm and PVC tubes for the pipelines with Dn 300 mm. The pipelines will be laid in trenches. The line of the networks shall follow the road line, placed at about 3 m from the road kerb.

Related installations

Public lighting works will be executed in order to ensure the nocturnal visibility, leading to a higher traffic safety and increased comfort on the entire analyzed route.

In order to regulate the traffic flow and increase the traffic safety, traffic lights will be employed at the crossroads between Densuseanu Street and Cazaban Street, Mestesugarilor Street and H.Ibsen Street.



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To ensure the traffic safety on the whole route, longitudinal and cross markings shall be drawn and the vertical traffic signalling shall be completed with road posts with reflective foil, especially with guidance panels.

Utilities

In order to avoid interventions on the road following eventual new works or maintenance works on the public utilities network, the documentation shall comprise the following:

protection channels for the water supply pipelines with diameters between 200 – 400 mm protection works for the existing electrical cables undercrossings on the O.Densuseanu street line for the future connections to the storm runoff

collector to be built in the area for the takeover of the storm waters collected in the lateral streets repositioning and burying of the over ground heat carrier pipeline on O. Densuseanu street into

the ground, the pipeline to be made of pre-insulated pipe, mounted on a sand bed

Cost projections

For cost projections, please see “bill of quantities” of the present volume and the “detailed bill of quantities” presented in Annexes of this Volume.

Permits and Authorizations

The urbanism certificate (for the issuance of which all relevant permits and authorizations have been issued) is presented in Volume of Annexes.

Component 2 - County road connecting the agricultural areas in the Cluj county to the marketing and processing centers in the city of Cluj-Napoca

The object of Component 2 is a County road linking agricultural areas in Cluj County to the new Marketing Center in the commune of Apahida and to processing centers in the city of Cluj-Napoca. The works consist of rehabilitating the existing county road DJ 105 S and by constructing a section of new road 4.900 m long. The project will also link two national roads, DN1 and DN1 C, thus allowing traffic on the Alba Iulia – Turda - Cluj-Napoca - Dej route to bypass the city of Cluj-Napoca, where the steep gradient of the Feleac Hill creates a major traffic hazard during slippery road conditions.

Geophysical Characteristics of the Location Land (Seismic Calculation Area and Corner Period, Foundation Ground Nature)

Geographically, the studied route belongs to the large unit of the Transylvanian Plain, which occupies the entire surface surrounded by Mures Valley to the South and by Somes River to the North.

Geologically, the region is made up of Miocene sedimentary deposits. The existing road is mostly asphalted to a length of about 5425 linear meters; it has a crushed stone surface to a length of 7275 linear meters; there is a section of rigid covering of 975 linear meters; and the rest of the road route is not yet defined.



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Geo-technical Characteristics of the Location Land

Geological and Geo-technical Conditions: Geographic Location

The studied location area geologically and geographically belongs to the Northwestern region of the country, lying to the Western margin of the Transylvanian plain, at its contact with Feleac hill.

Regional Geologic Conditions

The scenery is characterized by a succession of low hills separated by large valleys with low river meadows.

Local Geologic Conditions

Geologically, Miocene sedimentary rocks, such as sands, clays, slightly cemented gravel, and diorite sands with gypsum insertions, characterize the region.

The level of the underground waters is located a few meters deep, and thus underground water does not affect the natural land at road level, and even less the road infrastructure.

According to the 25 performed surveys, the land nature is of a “P1-ballast, P3-clayey dusty sand, and P5-sandy clay” type.

On the road route no instability phenomena that could affect the road could be noticed.

The road area belongs to the maximum freezing depth region of 80 – 90 cm, according to STAS 6054 – 77; from the seismic point of view it belongs to F macro-region, which is characterized by a coefficient Ks = 0.08, and a value of the corner period of Tc = 0.8 seconds, according to the country division specified by regulation P100 – 92.

The route is located in a I type climatic region according to the regional map of Romania.

Main Characteristics of the Construction

The significance category of the construction was selected according to the provisions of art. 22, Section 2 – “Designer’s Obligations and Responsibilities” – of Law no. 10 of January 18, 1995; “The Law of Construction Quality”; and according to “The Methodology of Establishing the Significance Categories of Constructions” from “The Regulation for Establishing the Significance Categories of Constructions” approved by Order of the Ministry of Public Works, Transports and Housing no. 31/N of October 2, 1995. The work described in this documentation belongs to C significance category – ordinary significance constructions. The category was established according to the enclosed table:

According to the provisions of STAS 10100/0-75 – “General Principles for Checking Construction Safety” -, the works belong to III significance category – medium significance constructions.



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DETERMINING THE IMPORTANCE CATEGORY

Nr. crt.

Main factors Associated criterion Points

1

Critical importance a.)directly affected people in the case of construction disfunctions b.) Indirect affected people in the case of construction disfunctions c.) The evolution of dangerous effects in the case of construction disfunctions

2 2 2 2

2

The socio-economical and cultural importance

a.) Community size and the value of the amenities which are make use the construction functions b.) The value of the functions for the local community

c.) The nature and importance of the functions

2 2 2 2

3

Ecological implications a.) The magnitude of perturbation induced by the construction act towards the natural environment and the existing constructions. b.) The degree of negative influence towards the natural environment and the existing constructions. c.) The active role in protecting /regenerating the existing constructions.

2 2 2 1

4

The importance of the life span of the construction

Construction life span. The magnitude of the correlation between the performances of the constructive measures and the resolution of the solicitations. The dependence of the functional performances on the evolution of the requirements during the utilization period.

4 4 4 4

5

The necessity of adaptation to the local environmental and terrain conditions

a.) The dependence of the construction solution with respect to the local environmental and terrain conditions. b.) The likelihood of local environmental and terrain conditions to evolve negative in time. c.) The way in which the local environmental and terrain conditions determine special activities /measures for the construction exploitation.

4 4 4 4

6

Necessary labor and materials

a.) The importance of labor and materials. b.) Necessary activities to maintain the construction. c.) Special

2 2 2 2



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activities in exploiting the construction. TOTAL 16

ACCORDING TO THE SCORE OBTAINED THE INVESTITION IS CLASSIFIED AS „C” CLASS OF IMPORTANCE

Technical Data of the Investment:

- Length: - 23.2 km according to the selected variant;

- Design speed: 40-80 km/h;

- Cross structure:

o platform: 9.00 m;

o roadway: 7.00 m;

strengthened shoulders: 2x1.00 m, out of which 2x0.50 m have the same road system as the roadway, and 2x0.50 m are shoulders strengthened against degradation.

Road Infrastructure: induced by a dimensional gravel

The new road infrastructure will be made according the existing road infrastructure having the following layers.

4 cm upper layer of BA 16

4 cm connection layer of BAD 25

8 cm base layer of AB 2

25 cm ballast layer stabilized with 6% cement

35 cm ballast.

The new road infrastructure will be made according the existing road infrastructure having the following layers on the asphalt concrete:




0-7 cm reshaped layer of AB 2

The new road infrastructure will be made according the existing road infrastructure having the following layers on the pre-existing stony road :






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10-20 cm ballast layer stabilized with 6% cement

35 cm ballast to undertake the dislevelment.

The road infrastructure on the strengthened shouldet width



35 cm ballast

Proposed design

The present documentation follows the existent law with respect to the:

Road construction and design

- Govern Ordinance no. 43/1997 regarding the road regime, Order no.

45/1998 regarding the approval of technical norms for design, construction and

modernization of roads, Order no. 46/1998 regarding the approval of technical

norms for establishing the technical class of public roads, STAS 863-85

regarding the geometric design of roads, STAS 2900-89 regarding the roads

and streets widths, STAS 1709/1, 1709/2 and 1709/3 regarding the freeze-

defreeze phenomenon of the road structure.

Water drainage systems

- STAS 10796/1-77 regarding the construction collecting and draining water

systems

Environmental protection

- Law no. 137/1995 regarding the environmental protection, Order No.

44/1998 regarding the environmental protection norms, Law no. 107/1997

regarding the water regime, Govern Ordinance no. 33/1995 regarding the

recycling process, the Order of water, forest and environmental ministry

regarding the approval of the technical conditions regarding the atmospheric

protection and the methodological norms regarding the determination of the

emissions of atmospheric pollutants.



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Based on the results obtained from the geological drills and the estimation of the present and future traffic, as designers of the current project we propose a new road structure, which is determined according to the normative of dimensioning flexible and semi-flexible road structures (analytical method) indicative PD 177-2001 with its behaviour verified to the freeze-defreeze actions.

General layout of the road

The road sector which makes the purpose of the current study steparets from the national road DN 1 at 455+600 km and overlaps with the county road DJ 103G on 5425 ml length till Aiton village.It has a detor in the north-est direction on 8275 ml length to detor the Aiton village.After this detor the road overlaps whit the county road DJ 103 G till the Boju village entrance on a sector of stone road on 7275 ml length.After this the road detour the Boju village on a new alignment of 875 ml length untill it reach the existent alignment of the county road Dj 105S throungh Pata village on 975 ml length. The studied alignment makes a cross whit the national road DN 1C at the 8+500 km through a new alignemt of 371 ml length..

Longitudinal profile

The longitudinal profile had been designed according to the STAS 863 using a minimum design step of 50 m. The designed declivities have values between 0,00% and 8,93 on the existing sectors, and maximum 7% on the new designed sectors with longitudinal curves with radius between 1600 and 40000 m.

In designing the red line several corrections were implemented in order to achieve the desired drainage and evacuation of water.

Cross section

The designed cross sections will have two lane of circulation in each direction corresponding to the technical class III with the following characteristics:

- platform 9,00 m

- pavement width 9,00 m

- shoulders 2 x 1,0 m

The cross slopes both pavement and shoulders will be 2,5% .

In the area of the road whit the 7% longitudinal declivitie it will be made one additional lane for slow vehicles between:9+850 – 13+500 km , L=3.65 km length, 3,5 m broad.

Road Infrastructure : induced by a dimensional gravel



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The new road infrastructure will be made according the existing road infrastructure having the following layers.





35 cm ballast.

The new road infrastructure will be made according the existing road infrastructure having the following layers on the asphalt concrete:




0-7 cm reshaped layer of AB 2

The new road infrastructure will be made according the existing road infrastructure having the following layers on the pre-existing stony road :




10-20 cm ballast layer stabilized with 6% cement

35 cm ballast to undertake the dislevelment.

The road infrastructure on the strengthened shouldet width:



35 cm ballast

Water drainages elements

For the rain and surface waters the current design proposes:

o Ditches having either unprotected or reinforced sections which will be

recorded to the existent or designed culverts. The type of ditch used will be

determined function of the existent longitudinal declivities: unprotected (0.5 - 5 %)

and reinforced



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o roadway gutters Km 0+975 – 1+850 left/right;

Km 13+750 – 14+675 left/right;

Km 14+925 – 15+925 left/right;

We suggest the building of a number of 24 new culverts type P2 and 21 new culverts type C2 , with all necessary fitting. Upstream fall rooms will be built, according to the land, and downstream monolithic wings will be built, and the riverbed will be covered in rubble stone.

We suggest the building of a new bridge with L=5.00 m length, and the existing bridge will be broadened and repaired L=10,00 m.

Side roads:

In order to protect and preserve the adequate condition of the new work, the existing side roads will be built using the same road system, as that of the newly designed roadway to a length of 25 m. Water removal will be ensured by culverts of ∅600.

Parapets:

In order to ensure safe traffic conditions, medium-heavy deformable parapets will be installed on isolated foundations. Their length will total 3225 linear meters.

km 7+650 – km 7+850 – right;

km 10+450 – km 10+725- left/right;

km 11+275 – km 11+525 – left/right;

km 12+025 – km 12+225 – right;

km 12+625 – km 13+325 – right;

km 17+650 – km 18+150 – left;

km 18+525 – km 18+625 – left;

km 21+100 – km 21+450 – left;

km 21+775 – km 21+900 – left.

Access roads:



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The access roads from the decongestion road route to the households in the area will be built of ballast and culverts of ∅400. In this way, safe access to the properties will be ensured without bringing mud onto the roadway.

Supporting walls:

In order to protect the cutting or mixed profile crossing areas, and to stabilize the slopes, cutting supporting walls are necessary. They will be 3.00 m high and, will be built in the following road sections:

Km: 7+950 – 8+125 – left/right;

Km: 9+925 – 10+325 – right;

Km: 12+100 – 12+175 – left;

Km: 12+300 – 12+425 – left;

Km13+675 – 13+750 – right;

Km: 14+675 – 14+750 – right;

Km: 16+500 – 16+625 – right;

Km: 16+675 – 16+750 – right;

Km: 18+950 – 19+025 – right;

Km: 20+100 – 20+250 – right.

Building crossroads with the other roads.

In order to prevent uncontrolled access to the roadway and to ensure maximum safety traffic conditions, we suggest the building of crossroads as follows:

- km 0+000 -crossroad between DN 1 and the Access way – “T” type level crossroad;

- km 23+196 -crossroad between DN 1C and the Access way – “T” type level

crossroad

The crossroads will be built according to: The regulations regarding the building of non-circular level outside-town crossroads, ind. CD 173-2001 .

Access to/from the decongestion variant will only be possible by the crossroads, according to the

draft plan.



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Level railway crossroads will be built according to valid regulations.

In order to ensure the residents’ access to the agricultural fields crossed by the road, short connecting sections will be built, which will ensure safe traffic conditions.

On the existing/designed earthen roads we will use a road system made up of 20 cm of ballast, and 15 cm of crushed stone to a width of 3.00 m.

Parking spaces

Taking into consideration the fact that chaotic stop of motor vehicles will be forbidden on the access way, stopping and parking spaces will be built on both sides, 700/1000 m apart. Larger parking spaces will be built in tourist areas, such as near large forests. The parking spaces will be equipped with benches and small tables, as well as with environmental trashcans for garbage disposal.

Horizontal and vertical signaling:

- when the works are finished, central and lateral longitudinal marking will be made, and signs will be installed, upon the approval of Cluj Road Police Department – according to STAS 1848/1-7-86.



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Environmental Considerations

Component 1 - Access road to the N-W industrial area Oradea – Bors Water

Hydro geological features of the site

The objective is located in the medium terrace of the Crisul Repede River, at an average elevation of 120-140 m. The hydrostatic level of the site is variable in depth: 1.8 – 2.9 m.

Water supply

Due to its specificity, the objective does not require water supply.

Waste Water Management

The sewerage system for the storm waters on the surface of the ring road shall be executed in two ways:

collection through the outflows connected to the storm waters sewerage network and evacuation into Crisul Repede River

collection through tubular culverts allowing the discharge into the planned trenches and evacuation into the Petea creek

Impact

During the execution stage of the investment, the quality of the ground waters shall not be affected.

During the operational stage of the objective, the rainwater sweeping the road platform may wash off sedimentary dust particles, oil products and accidentally spilled lubricants.

Provided that the road surfaces and the vehicles are suitably maintained, the parameters of the evacuated storm waters shall rank within the provisions of the NTPA 001/2002 and NTPA 002/2002 normative acts.

The rainwater drainage (storm runoff) networks shall be executed in keeping with the execution details and the specification books, using joint materials and systems with a high sealing degree in order to avoid the ex-filtrations which could affect the quality of the ground waters.

Consequently, it can be said that the execution and the operation of the objective shall have a low impact on the environmental agent WATER, provided that the objective is properly built, maintained and operated.

Air

General specifications

From a climatic perspective, the city of Oradea is characterized by a moderate, continental-temperate climate, with the following features :

- air temperature o isotherm value 100 C o annual average temperature 80 C - 100 C

- annual average rainfall 500-700 mm



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- annual number of fair days < 60 days

- sunshine duration 2000-2100 h/year

- annual number of clouded days 100-120 days

- winds

o number of hours per year with a wind speed exceeding 4m/s IV area with 2500 hours o predominant wind direction W and NW

Due to the fact that the Access road to the N-W industrial area Oradea – Bors crosses areas featuring various types of economic activity (industrial, agronomical, livestock raising etc.) the air quality in the area will be influenced by emissions specific to each area.

Pollution sources and agents

During the execution stage of the works

During the execution of the works, the emissions of pollutants in the air mainly come from the exhaust gas of the equipment employed in the construction of the Access road to the N-W industrial area Oradea – Bors.

The equipment operates on diesel fuel, with an estimated average consumption of 100 l/h.

Using the CORINAR measuring methodology in the estimation of the emissions produced by the road construction equipment, the following mass flows result:

INDICATOR Emission factor g/l Mass flow

NOx 48.80 1.350

CH4 0.17 0.005

COV 7.08 0.196

CO 15.80 0.438

N2O 1.30 0.036

CO2 3183.0 88.416

SO2 10.00 0.277

Particles 5.73 0.159

NH3 0.07 0.158

During the operational stage of the objective

Following the putting into service of the Access road to the N-W industrial area Oradea – Bors to the development areas of the Oradea city, the exhaust gas emissions shall be in direct variation with the number of vehicles involved in traffic and directly influenced by the used fuel type (gasoline, diesel fuel).

The traffic flow diagrams read the following daily average of vehicles circulating on this access road each year:



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Position Local – Oradea development areas

+ Traffic through and outside the locality

Number of vehicles

Access to the development area West Oradea + traffic to Bors Customs 7.567

Access to the development area NW Oradea + traffic to Satu Mare city 13.087

Access to the development area South Oradea + traffic to Arad city 7.500

Access to the development area South-East Oradea + traffic to Deva city 13.750

Access to the development area East Oradea + traffic to Cluj city 14.07

TOTAL daily average per year 55.921

The values of the emissions produced by the daily (24 hours) traffic on the access road along its entire length have also been estimated. The CORINAR measuring methodology was employed.

INDICATOR Mass flow

kg/day

E NOx 3031

E NOx gasoline 1020

E CO diesel fuel 2428

E CO gasoline 27100

E SO2 diesel fuel 710

E SO2 gasoline 100

E COV diesel fuel 579

E COV gasoline 2844

E diesel fuel partially 305,3

The inventory of the atmospheric pollutants emissions incurred by mobile sources employed in the execution of works as well as by sources directly involved in the traffic:

Source name Pollutants and mass flows

Kg/ h CO NOx SOx COV Powders

a. In the execution stage of the works Road construction equipment 1.578 4.86 1.00 0.71 0.57 b. In the operational stage of the objective Vehicle traffic / diesel fuel 101.18 126.32 29.58 24.12 12.72 Vehicle traffic / gasoline 1129.17 42.50 41.66 118.5 -

Air pollution forecast

During the execution stage

The average hourly quantity of diesel fuel to be consumed, the intermittent working condition of the equipment and the emission dispersion under the influence of the atmospheric agents shall incur a low level



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of emissions in the air, which shall not negatively affect the air quality, as the values rank within STAS 12574.

During the operational stage

The air pollution sources will be caused by the vehicle traffic.

The location of the access road to areas in the vicinity of the Crisul Repede River, Peta creek and Adona Valley contributes to the dispersion of the emissions under the influence of the atmospheric agents. The dispersion will be easily carried out because the land accommodating the objective is flat, without significant elevation variation.

Soil

Types of soils in the area and their features

The soil within the perimeter of the objective ranks within the class of clay-loam soil, characterized by a progressive degree of de-basification of the clay – loam humus composition and intense soil eluviations processes.

This soil type has a moderate loam or loam-clay and clay-loam texture.

It has a granular structure with porosity between 48-50%.

The humidity is generally high; the clay is highly sensitive to frosting defrosting, with an increased free swelling capacity.

The deformation module varies between 70-130 daN/cm3.

Soil pollution sources

No soil pollution sources have been identified during the execution stage of the works.

However, the execution of the embankment works will affect the soil by causing mechanical modifications in its structure.

Following the putting into service of the objective, the wastewater exfiltrations from the planned rainwaters sewerage networks represent the only possible pollution sources.

Environmental impact forecast

The estimated impact incurred by pollution

The rainwater sewerage networks shall be executed in keeping with the field specific regulations, using joint materials and systems with a high sealing degree in order to avoid ex-filtrations which could affect the soil quality during the operation of the ring road.



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Physical impact on the soil incurred by the proposed activity

The physical impact on the soil shall become effective during the execution stage of the objective only, upon the execution of the embankment works. The following unavoidable (but reclaimable in time) modifications shall affect the soil quality and structure:

modification of pedogenetical processes by the interruption of the vegetation, micro fauna and mezofauna life cycles

modification of the physical-mechanical soil properties texture, loosening degree (compaction), internal cohesion and friction

modification of hydro physical, aeration and thermal properties

Modification of the factors favoring erosion occurrences

In the analyzed area, the soil is located on a generally flat area and consequently it is not prone to erosions.

Change of the soil density

Considering that the diggings will be rather shallow and the fills will be made with the material resulted after the diggings, the soil layers will not blend.

The fills will be mechanically compacted after laying each course, so that during the objective operation there will be no soil settlements and implicitly no cracks or damages in the road structure.

Modifications in the soil biological activity, quality, vulnerability or strength

Due to the compaction of the filling courses, the soil vulnerability and strength will not be affected.

Trans-border impact

Not applicable

Subsoil

Tectonic structure, neo-tectonic activity, seismological activity

According to the Normative Act P100-92, the region where the objective is located features the following parameters:

Seismic coefficient Ks = 0.08

Computation seismic area F

Corner period Tc = 0.7

Protection of subsoil and ground water resources

Considering that the diggings are rather shallow, the subsoil will not be affected during the works execution period.

During the roads operation period, the soil protection measures shall also ensure the subsoil protection.



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Pollution of subsoil, including rocks

Not applicable

Subsoil quality

The subsoil quality is good as there are no other potentially polluting objectives in the immediate vicinity of this objective.

Subsoil resources

The area is not of interest in what concerns the useful mineral substance extraction. No subsoil resources are known in the objective area.

Extraction conditions for the natural resources

Not applicable

Relationship between the subsoil resources and the protected areas or the landscape

In the vicinity of the objective location there are no protected areas and the access road being oriented towards the development areas of the Oradea city will not affect the landscape.

Conditions for the execution of geological engineering works

Not applicable

Geological processes - landslides, erosions, carst areas, areas prone to landslides

The area is not prone to erosions or landslides.

Valuable protected geological objectives

Not applicable

Expected environmental impact

In case the objective is executed as per the technical provisions and the laws in force and it is operated under normal conditions, the expected subsoil impact will be insignificant.

Biodiversity

Information about the ecosystems in the site

According to the Law 5/2000 regarding the approval of the Improvement Plan for the National Territory, Section 3 - Protected Areas, no legally protected species exist in the objective area.

Because the Access road to the development areas will be located inside the locality, in an inhabited area, the characteristic fauna is not very rich, being represented mainly by edaphic species and insects.

The main river in the area is Crisul Repede River, which accommodates a specific ichthyofauna.



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Expected impact and reduction measures

The expansion of the road pavement requires in certain sections the cutting of the existing trees, with no economic value.

In order to eliminate the impact on the biodiversity in this site area, the investment provides for planting trees and creating green spaces. Thus, 2,275 trees of high-value essence (nut trees, lime trees) and 3,110 m of hedges will be planted on two rows and 22,650 m² of green areas will be created.

Given that operating the Access road to the N-W industrial area Oradea – Borss to the economic development areas of Oradea city also influences the decrease of the pollution effect in downtown Oradea, the effect on biodiversity is expected to be a positive one.

Landscape

Located inside the locality, the Objective Access road to the N-W industrial area Oradea – Borss to the development areas of the Oradea city is included in the General Urban Plan and will not have a landscape environmental impact because it follows existing road or street routes.

The areas affected by the investment are included in the public realm administered by the Local Council of the city of Oradea.

Social and Economic Environment

The proposed objective will have a positive impact for the development of a healthy social and economic environment:

increased attractiveness for the investors in this area newly created jobs increased mobility of the population towards the industrial parks lower costs and shorter time of transport to the workplace better health of the population by reducing the atmosphere pollution degree

Ethnic and Cultural Conditions

The investment objective will not affect the local ethnic and cultural conditions.

Because the Access road to the development areas will also give the transiting means of transport the opportunity to by-pass the city, this objective will have a positive effect on the protection of the architectonic monuments in downtown Oradea, which are currently affected by the intense traffic.

Conclusions

The technical solution adopted for the execution of the Access road to the N-W industrial area Oradea – Borss to the economic development areas of the Oradea city was selected following a technical and economic analysis based on the following criteria:

make sure the road structure withstands the current and future heavy traffic make sure the storm waters are collected off and evacuated from the road pavement surface ensure the traffic safety under day-time and night-time conditions avoid any future road repairs to damaged technical public networks)



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The selected variant fits from all points of view and it also has the advantage of following the routes of certain existing roads or streets, thus having a minimal environmental impact.

Interpretation of results per environment factors:

The worthiness grades for the quality index calculated for each factor are established by means of the quality index worthiness scale as follows

Environment factor Quality index Ic Worthiness grade Nb

WATER 0.0-0.25 9

AIR 0.25-0.50 8

SOIL, VEGETATION , FAUNA 0.0 – 0.25 9

HUMAN SETTLEMENTS 0 10

The analysis of the worthiness grades leads the following conclusions:

- The AIR environment factor will be affected within the allowed limits, level 2 - The WATER and SOIL, VEGETATION, FAUNA environment factors will be affected within the allowed

limits, level 1 - the HUMAN SETTLEMENTS environment factor will not be affected by the investment

Pollution Index

The overall pollution index IPG determined by the Rojanski method has the value of 1.23, which indicates that the Access road to the N-W industrial area Oradea – Bors will affect the environment factors within the allowed limits.

Component 2 - County road connecting the agricultural areas in the Cluj county to the marketing and processing centers in the city of Cluj Napoca Water

Hydro geological features of the site

The objective is located in the South - East area of the Cluj COUNTY, on the corridor of the Somesul Mic River.

The ground waters of the site are represented by infiltrations with various flow.

The hydro graphic network of the area is mainly dominated by the Somesul Mic river and its branch streams, most of them with a temporary or very low outflow.

Water supply

Due to its specificity, the objective does not require water supply.

Waste Water Management

The collection of the storm waters from the road surface shall be made by the execution of unprotected trenches.



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The discharge of the trenches content into the torrential valleys of the area shall be made with ∅ 800mm tubular culverts.

Impact

During the execution stage of the investment, the quality of the ground waters shall not be affected.

During the operation of the objective, the rainwaters sweeping the road platform may wash off sedimentary dust particles, oil products and accidentally spilled lubricants.

Provided that the road surfaces and the vehicles are suitably maintained, the parameters of the evacuated storm waters shall rank within the provisions of the NTPA 001/2002 norms.

Consequently, it can be said that the execution and the operation of the objective shall have a low impact on the environmental agent WATER, provided that the objective is properly built, maintained and operated.

Air

General specifications

From a climatic perspective, the area accommodating the objective is characterized by a moderate, continental temperate climate, with the following characteristics:

- air temperature o isotherm value 80 C o annual average temperature 80 C - 100 C

- annual average rainfall 500-700 mm

- annual number of fair days < 60 days

- sunshine duration 2000-2100 h/year

- annual number of cloudy days 100-120 days

- winds

o number of hours per year with a wind speed exceeding 4m/s IV area with 2500 hours o predominant wind direction W and NW

The air quality in the project area is very good because the access roads to the development areas of the Cluj County predominantly cross the countryside, without industrial activity.

Pollution sources and agents

In the execution stage of the works

During the execution of the works, the polluting emissions in the air mainly come from the exhaust gas of the equipment employed in the building of the quick access road.

The equipment operates on diesel fuel, with an estimated average consumption of 100 l/h.



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Using the CORINAIR measuring methodology in the estimation of the emissions produced by the road construction equipment, the following mass flows result:

INDICATOR Emission factor g/l Mass flow

NOx 48.80 1.350

CH4 0.17 0.005

COV 7.08 0.196

CO 15.80 0.438

N2O 1.30 0.036

CO2 3183.0 88.416

SO2 10.00 0.277

Particule 5.73 0.159

NH3 0.07 0.158

In the operational stage of the objective

Following the putting into service of the Quick access road to the development areas of the Cluj County, the exhaust gas emissions shall be in direct variation with the number of vehicles involved in traffic and directly influenced by the used fuel type (gasoline, diesel fuel).

The traffic flow diagrams read a daily average of 1,067 vehicles circulating on this access road each year.

The values of the emissions produced by the daily (24 hours) traffic on the access road along its entire length have been also estimated. The CORINAR measuring method was employed

INDICATOR Mass flow kg/day

E NOx 95.6

E NOx gasoline 32.23

E CO diesel fuel 76.60

E CO gasoline 856.36

E SO2 diesel fuel 22.4

E SO2 gasoline 3.16

E COV diesel fuel 18.28

E COV gasoline 89.87

E diesel fuel partially 9.63

The inventory of the emissions of atmospheric pollutants incurred by mobile sources employed in the execution of works and by sources directly involved in the traffic respectively:



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Name of source Pollutants and mass flows

Kg/ h CO NOx SOx COV Powders

a. In the execution stage of the works Road construction equipment 1.578 4.86 1.00 0.71 0.57 b. In the operational stage of the objective Vehicle traffic / diesel fuel 3.20 3.98 0.94 0.76 0.40 Vehicle traffic / gasoline 35.7 1.35 0.13 3.75 -

Air pollution prognosis

In the execution stage

The average hourly quantity of diesel fuel to be consumed, the intermittent working condition of the equipment and the emission dispersion under the influence of the atmospheric agents shall incur a low level of emissions in the air, which shall not negatively affect the air quality as the values rank within STAS 12574.

In the operational stage

The pollution sources will be caused by the vehicle traffic.

The emissions dispersion under the influence of the atmospheric agents shall be favored by the flatness of the land the objective is located on, without significant differences in level.

Soil

Soil types and features in the area

The soil within the perimeter of the objective ranks within the class of clay-loam soil, of the type of brown silt loam soils (podsolitic type).

The soil has a loam or dusty-loam texture in the A0 level and a clay texture in the B1 level Consequently, these soils are excessively humid in the rain seasons and droughty in the dry seasons due to intense evaporation.

Soil pollution sources

During the execution of the works no soil pollution sources have been identified.

However, the execution of the embankment works will affect the soil by causing mechanical modifications in its structure.

Following the putting into service of the objective, the only possible soil pollution sources will be the rain waters collected from the pavement of the roads accidentally loaded with vehicle oil and lubricating products.

Impact prognosis

The estimated impact incurred by pollution



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During the operation of the objective, the rain waters sweeping the road platform can also wash off sedimentary dust particles, oil products and accidentally spilled lubricants.

Provided that that the road surfaces and the vehicles are suitably maintained, the parameters of the evacuated storm waters shall rank within the provisions of the NTPA 001/2002 norm.

Physical impact on the soil incurred by the proposed activity

The physical impact on the soil shall become effective during the execution stage of the objective only, upon the execution of the embankment works. The following unavoidable (but reclaimable in time) modifications shall affect the soil quality and structure:

modification of the pedogenetical processes by the interruption of the vegetation, micro fauna and mezzo fauna life cycles

modification of the physical-mechanical soil properties: texture, loosening degree (compaction), internal cohesion and friction

modification of the hydro physical, aeration and thermal properties

Modification of the factors which favor erosion occurrence

To prevent any landslide occurrences, the project provided for the construction of retaining walls with a total length of 200 m.

Change of the soil density

Considering that the diggings will be rather shallow and the fills will be made with the material resulted after the diggings, the soil layers will not blend.

The fills will be mechanically compacted after laying each course, so that during the objective operation there will be no soil settlements and implicitly no cracks or damages in the road structure.

Modifications in the soil biological activity, quality, vulnerability or strength

Due to the compaction of the filling courses, the soil vulnerability and strength will not be affected.

Trans-border impact

Not applicable

Subsoil

Tectonic structure, neo-tectonic activity, seismological activity

According to the Normative Act P100-92, the region where the objective is located features the following parameters:

Seismic coefficient Ks = 0.12

Computation seismic area E

Corner period Tc = 0.7



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Protection of subsoil and ground water resources

Considering that the diggings are rather shallow, the subsoil will not be affected during the works execution period.

During the roads operation period, the soil protection measures shall also ensure the subsoil protection.

Pollution of subsoils, including rocks

Not applicable

Subsoil resources

The area is not of interest in what concerns the useful mineral substance extraction. No subsoil resources are known in the objective area.

Extraction conditions for the natural resources

Not applicable

Relationship between the subsoil resources and the protected areas or the landscape

In the vicinity of the objective site there are no protected areas and the construction of the access road to the development areas of the Oradea city will not affect the landscape.

Exaction conditions for the geological engineering works

Not applicable

Geological processes - landslides, erosions, carst areas, areas prone to landslides

The area is not prone to erosions or landslides.

Valuable protected geological objectives

Not applicable

Expected environmental impact

In case the objective is executed as per the technical provisions and the laws in force and it is operated under normal conditions, the expected subsoil impact will be insignificant.

Biodiversity

Information about the ecosystems within the site area

According to the Law 5/2000 regarding the approval of the Improvement Plan for the National Territory, Section 3 - Protected Areas, no legally protected species exist in the objective area.

The existing vegetation in this site mainly consists of herbaceous plants specific to this area and altitude.



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In the objective area the fauna is only represented by the micro-fauna and middle-fauna, potentially the mega-fauna consisting of small-sized rodents.

The main river in the area is Somesul Mic River, which accommodates a specific ichthyofauna.

Expected impact and reduction measures

The investment works will affect the local vegetation and the corresponding land fauna. In these areas the vegetation will fully disappear and the fauna will migrate to other areas.

In the operation period, the research activities have showed that the vegetation located in the immediate vicinity of the highly used roads is slightly affected by the chemical compounds of the exhaust gas.

The corresponding fauna will withdraw from the road-adjacent areas and will live in the neighboring areas.

Landscape

The objective will be located inside and outside the following localities: Ceanu Mic , Aiton, Boju si Pata , Cluj County.

This quick access road will not have a landscape environmental impact because it follows existing road routes.

Social and Economic Environment

The proposed objective will have a positive impact for the development of a healthy social and economic environment in the South - East area of the North - West Region.

Quick access to the “Transilvania” Agricultural Marketing Center Increased attractiveness for the investors in this area – development of SME-type farms Newly created jobs Increased mobility of the population and the farming producers Better health of the population by reducing the atmosphere pollution degree

The proposed road structure was designed in such a way that the heavy traffic vibration would not affect the strength structure of the households situated in the vicinity of the road.

Ethnic and Cultural Conditions

The investment objective will not affect the local ethnic and cultural conditions.

Conclusions

The technical solution adopted to execute the Quick access roads to the economic development areas of the Cluj County was selected following a technical and economic analysis based on the following criteria:

make sure the road structure withstands the current and future heavy traffic make sure the storm waters are collected off and evacuated from the road pavement surface ensure the traffic safety under day-time and night-time conditions avoid any future road repairs to damaged technical public networks



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The selected variant fits from all points of view and it also has the advantage of following the routes of certain existing roads or streets, thus having a minimal environmental impact.

Interpretation of the results per environment factors:

The worthiness grades for the quality index calculated for each factor are established by means of the quality index worthiness scale as follows

Environment factor Quality index Ic Worthiness grade Nb

WATER 0.0 - 0.25 9

AIR 0.25 - 0.50 8

SOIL, VEGETATION, FAUNA 0.0 – 0.25 9

HUMAN SETTLEMENTS 0 – 0.25 9

The analysis of the worthiness grades leads to the following conclusions:

The AIR environment factor will be affected within the allowed limits, level 2 The WATER and SOIL, VEGETATION, FAUNA environment factors will be affected within the

allowed limits, level 1 The HUMAN SETTLEMENTS environment factor will not be affected by the investment

Pollution Index

The overall pollution index IPG determined by the Rojanski method has the value of 1.3, which indicates that the Quick access roads to economic development areas of the Cluj County will affect the environment factors within the allowed limits.



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Financial and Economic Analysis Capital Investment

TOTAL INVESTMENT BUDGET BREAKDOWN, in thousand Euros

Local con-tribution Other

0 2 3 4

1.11.2 385,209.01.3 217,865.0

603,074.0 0.0 0.0

2.1 0.0 0.0 0.02.1.12.1.22.1.32.1.42.1.5

2.20.0 0.0 0.0

3.1 116,029.03.2 246,003.03.3 0.0 344,245.0 0.0

3.3.13.3.23.3.33.3.43.3.5 100,000.03.3.6 244,245.0

3.43.53.6 0.0 0.0 0.0

3.6.10.0 706,277.0 0.0

4.1 24,424,522.04.24.34.44.5

4.5.14.5.2

24,424,522.0 0.0 0.0

5.1 525,345.05.2 0.0 419,769.0 0.0

5.2.1 0.0 317,519.0 0.05.2.1.1 122,123.0

5.2.1.2 195,396.0

5.2.2 102,250.05.3 1,563,695.05.4 120,000.05.5 557,817.0

2,089,040.0 1,097,586.0 0.0

6.16.2

0.0 0.0 0.027,116,636.0 1,803,863.0 0.0

342,734.029,263,233.0 0.0

1CHAPTER 1. Expenses for land acquisition and site preparation

Environmental worksSub-total Chapter 1

CHAPTER 2. Expenses to connect the works to the main services

CHAPTER 3. Expenses for design and technical assistance

Land acquisitionSite preparation

Works to connect the system to the main servicesWater supply connectionSewerage system connection Gas network connectionPower supply connectionCommunications networks connection

Region:

No Categories of Costs

Project Name

"Access Ways for Development in the Two Main Economic Centers of the North - West Region" Cluj Napoca and Oradea

North - West

Eligible costsNon-eligible costs

Fees to services providers for connectionsSub-total Chapter 2

Field investigation Legal approvals for project implementationDesign and engineering

Technical expertiseFeasibility StudyDesign BriefTender / Construction DrawingsTender Design VerificationISC inspectorate

Technical assistanceProcurement (Tender Docs)

SupervisionSupervision services during the construction period

Sub-total Chapter 3

Buildings, construction, installationsCHAPTER 4. Direct Construction Costs

Technological assembling Independent equipment included in the final worksIndependent equipment and transport meansLong life independent equipment

Signalisation, telecommunicationsHardware and software for processes supervision

Sub-total Chapter 4CHAPTER 5. Other Expenses

Site MobilisationLegal charges, taxes, financing costs

Legal charges and taxesTax for the Social House of Constructors (0.5% of 4)State inspection for constructions (0.1%+0.7%)

Financial cost (0.5%) of the local contributionGeneral construction contingencies

CHAPTER 6. Handing Over Expenses

Project Marketing, Promotion & VisibilityProject managementSub-total Chapter 5

VAT on non-eligible costsGRAND TOTAL PROJECT VALUE

Training of operating personnelTechnological tests, handing over expertisesSubtotal Chapter 6

Total (1+2+3+4+5+6) without VAT



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Procurement Strategy All purchases to be made under the project budget will compny to both Romanian law – as it applies to lacal public authorities, namely OG 60 and related – and to EU procurement rules. Tenders will be preceded by public announcements and follow the above mentioned acquisition procedures.

Macroeconomic Outlook

Background

Historical Development

Traditionally a largely agrarian economy, Romania had begun to develop an industrial base in the 1880’s. Free-market industrial development had led to the creation of modern processing and production facilities, particularly in the manufacturing, oil extraction and refining, and light industry sectors. Following World War II, Soviet occupation of Romania had led to the formation in 1947 of a Communist state. Large-scale industrial development after the Soviet model was begun in the 1950’s and accelerated after former president Nicolae Ceausescu took power in 1965. Industrial development was at the time (centrally) planned to supply COMECOM markets, thus built to Eastern Block, not to national, scale. Once the Communist regime was overthrown in late 1989, and the COMECOM collapsed in the early 1990’s, the traditional markets for Romania’s aged, partially obsolete industrial production facilities were lost. As many goods produced to Eastern Block standards were not able to compete in the world (or even in the home) market, industrial production fell dramatically in the early 1990’s. Successive governments until about 1998 have been slow to tackle needed structural reform. Although significant progress has been made since 1998 in the areas of economic and democratic reforms, privatization of many of the largest state-owned enterprises has yet to be completed.

Post 1990 Evolution and Steps towards EU Accession

EU membership has been a major goal of all post 1990 Romanian governments. In the short term, the main advantage of membership is reduced customs rates and non-tariff barriers, which will facilitate exports to and imports from European Union nations. Additionally, the EU requirement of aligning Romania’s legislative, regulatory, and fiscal standards to the levels set by the European Union is a major driver for the country’s post-Communist reform process. In 1993, Romania signed an agreement on associate membership of the European Union. The agreement was ratified in 1995. The EU decided to open accession negotiations with Romania in late 1999 and negotiations were formally launched in February 2000. At the request of the EU Commissioner for Enlargement, Romania prepared and submitted the Medium-Term Economic Strategy (2000-2004) in March 2000 as a basis for negotiations. The year 2007 was chosen as a target date for Romania’s joining the EU at Copenhagen summit held at the end of 2002. In April 2005, Romania had signed the accession memorandum with the EU, scheduled to come in effect in January 2007. Romania has made notable progress in aligning with the aquis communitaire (governing laws of the EU) in all required areas. A number of normative acts, beginning with the fundamental law and the Constitution, were adapted to European standards.



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Current Situation

After a rough ride after 1990, the macroeconomic environment of Romania has experienced a steady improvement over the last four years, characterized by increasing macroeconomic stability and decreasing inflation. At an average rate of about 5.6% per year, GDP growth has been among the highest in the region (with investment and private consumption as main drivers in 2003 and 2004). Overshooting the official projections and market expectations, the rate of economic growth had accelerated in 2004 when GDP grew by 8.3%. For 2005, the GDP growth is estimated to be in the range of 5.5% to 6% positive.

GDP of Romania in monetary terms, 1970 - 2004

GDP OF ROMANIA IN MONETARY TERMS - HISTORICAL TRENDIN USD BILLIONS, 1970 - 2004

15

30

45

60

75

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

USD

BILL

ION

S

Starting with January 1, 2005, the new Romanian government has implemented a progressive fiscal reform package, based on the introduction of a flat rate of 16% for corporate profit tax (as compared to 25% so far) and for personal income tax (as compared to a progressive tax system with rates ranging from 18% to 40%). This remarkable application of classic economic theory (the Leffer curve) is likely to lead to substantial increases in both FDI and domestic, particularly SME growth. The first reactions of the market to the new fiscal code have been strongly positive, with the Bucharest Stock Exchange registering a 15% hike in the first weeks of 2005. Monetary developments have contributed as well to strong returns. At the start of 2005, broad money was 28 percent higher year on year in real terms, pointing to a strong re-monetization of the economy, owing mainly to the rise in ROL-denominated savings, against the background of clear disinflation. Lending has continued to expand, yet at a moderate pace, which is sustainable in the long run.

Inflation and Exchange Rates

Inflation had reached for the first time in the last 15 years single digits in 2004, at 9.3%, as compared with 14.1% in 2003.



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Yearly inflation in Romania during 1990 - 2004

0.0%

50.0%

100.0%

150.0%

200.0%

250.0%

300.0%

YEARLY INFLATION IN ROMANIA

Inflation 35.0% 123% 210% 292% 137% 32.3%56.9% 154.0 41.0% 45.8%45.7% 34.5%22.5% 14.1% 9.3%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

The National Bank of Romania pursues a monetary policy aimed at mid-single digit inflation rates by 2006, a goal most analysts consider realistic and attainable.

Evolution of the exchange rate ROL / EUR / USD during 1990 - 2004

CURRENCY EXCHANGE RATE OF THE ROMANIAN LEUMONTHLY AVERAGES JAN. 1991 - APRIL 2005

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

ROL

/ FCU

USD ECU until 12.31.98, EUR from 1.1.99

Dramatic improvements in Romania’s rate of inflation, an 8.3% economic growth rate and the relaxation of National Bank controls over the exchange rate have resulted in a halt of the depreciation of the national currency ROL in November 2004. The Romanian Leu had appreciated with 11.4% in the last six months against the Euro, from a low of ROL 41,870 for 1 EUR in November 2004, to 36,211 ROL for 1 EUR in April 2005.



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Some of the adverse effects of the strengthening for the national currency are mitigated by the continued weakening of the US Dollar against the EURO, which has a beneficial effect on the Romanian economy, as it will help Romania to preserve competitiveness in EU markets, while limiting the domestic impact of price increases for energy linked to US Dollar prices.

Foundations of Economic Growth

1.1.1.1.1 International

The world economy solid U.S. performance and a higher oil prices and the effects of exchange-rate appreciation caused quarterly output in a number of torrid export-led expansion in China. Due to a mix of factors, among which higher oil and raw material prices the effects of exchange-rate appreciation, high-income countries have experienced a decline of their rate of growth in the second half of 2004. By contrast developing economies, and in particular transition economies in Eastern Europe, have, on the average, outgrown high-income countries, with aggregate GDP rising by approx. 6.6 %. Individual performance has contributed to Romania’s growth rate of 8.3%, but based in part on macroeconomic circumstance all developing regions have grown faster in 2004 than they did during the past decade. As the high growth rates of 2004 have been in good part driven by macroeconomic conditions, the same factors will influence future growth. Currently, this means a weakening external demand, continued high oil prices, and rising international interest rates. To this should be added the real appreciation of many currencies in Eastern Europe, including in Romania. Based on the conditions described, the pace of growth for the region is expected to slow down to 5.5 percent in 2005 and to stabilize at around 5 % during 2006-2007. However, according to the World Bank, Romania may be one of the countries that will ride this trend at the top of the range, as “central and eastern European countries are somewhat better than the regional average, with growth expected to slow in 2005 before picking up in 2006 and 2007. Those countries that recently acceded to the European Union should continue to benefit from robust investment inflows, as increasing shares of European production are transferred to these relatively low-wage sites. Meanwhile, Bulgaria, Romania and Croatia are expected to see similar benefits as their own accession dates approach”1.

1.1.1.1.2 Domestic

Romania's main macroeconomic challenge is that the current output fails to accommodate the significant increase in domestic demand. Consequently, the current account deficit ran at almost 7.7 percent of GDP in 2004. Although the deficit was financed via autonomous capital inflows and the foreign exchange reserves of the NBR increased considerably in 2004 and January 2005, reaching 5 months of imports, a cautious economic policy stance requires measures to allow the simultaneous fulfillment of three goals, i.e. sustainable, long-term economic growth, keeping the current account deficit within manageable limits, and further disinflation in 2005 and the years to come, when inflation rate is set to fall to 2-3 percent, in line with EU requirements. Essentially, Romanians manage, in the aggregate, to consume more than they produce, importing the difference. The negative current account has limited effects as long as the cash flows are

1 “Global Development Prospects 2005”, World Bank, 6 April. 2005, p. 24



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balanced by foreign direct investment, foreign donor financing (especially of infrastructure projects), and private cash transfers from a large expatriate community. Assuming that the accession process unfolds uneventfully, stable political, legal and macroeconomic conditions, and the increase in confidence brought about by the approaching accession to the UE will continue to increase the inflow of FDI, which in turn will impact positively on productivity, improvement expected to eventually lead to a balancing of the balance of trade. Such positive perspectives are expected (as per WB. IMF, EIU etc.) to most likely result, for the next five years, in economic growth rates in the 5% to 6,5% range. Conversely, delays in the accession process and / or any worsening of macroeconomic conditions internationally or nationally could conceivably lead to lesser results, from slightly too dramatically lower growth rates. The following point out the most likely (but plausible) outcomes under three scenarios.

Assumptions for assessment of alternative scenarios

Economic Growth Scenarios

The following economic growth scenarios have been developed by the Consultant based on macroeconomic indicators published by the Romanian Ministry of Finance, the Romanian National Bank, taking into account analyses published in the Economist Intelligence Unit. All scenario forecasts, both macroeconomic and demographic, reflect the consultant’s professional opinion.

1.1.1.1.3 Base Case Economic Growth Scenario

The base case economic growth scenario assumes no delays in Romania’s accession to the EU, as well as steady continued economic growth.

Base case economic growth scenario for Romania

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201035.73 37.06 40.09 42.83 46.12 49.93 52.8 55.8 59.0 62.4 66.0 69.81,624 1,685 1,822 1,947 2,096 2,270 2,400 2,538 2,684 2,838 3,001 3,174

-15.1% 3.7% 8.2% 6.8% 7.7% 8.3% 5.8% 5.8% 5.8% 5.8% 5.8% 5.8%45.8% 45.7% 34.5% 22.5% 14.1% 9.3% 7.5% 7.0% 6.0% 5.0% 4.5% 4.0%

This would translate in a strong increase in FDI, most likely exceeding EUR 2 billion per year, which, coupled with increased demand in local and EU markets, will lead to a steady economic growth of ca. 5.8% over the next five years.

1.1.1.1.4 Optimistic Economic Growth Scenario

The optimistic scenario starts with similar assumptions for the base case, supposing higher FDI rates most likely reaching 2.5 billion per year, and a continuation of the 2004 performance in the range of approx. 8% per year. The difference between the “base case” and the “optimistic” scenarios rests, apart from higher FDI, on different assumptions regarding (higher) demand for Romanian goods on the EU and world markets (see Table 1.5 below).



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Optimistic economic growth scenario for Romania

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201035.73 37.06 40.09 42.83 46.12 49.93 53.9 58.2 62.9 67.9 73.4 79.21,624 1,685 1,822 1,947 2,096 2,270 2,451 2,647 2,859 3,088 3,335 3,601

-15.1% 3.7% 8.2% 6.8% 7.7% 8.3% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%45.80% 45.70% 34.50% 22.50% 14.10% 9.30% 7.50% 5.00% 4.00% 3.00% 3.00% 3.00%

1.1.1.1.5 Pessimistic Economic Growth Scenario

The Pessimistic scenario assumes delays in Romania’s accession to the EU until 2008 or 2009. Lower FDI rates and economic growth rates would ensue, as well as higher inflation, lower purchasing power and consumption rates of the population (see Table 1.6 below).

Pessimistic economic growth scenario for Romania

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201035.73 37.06 40.09 42.83 46.12 49.93 48.4 47.2 48.2 49.6 51.6 54.21,624 1,685 1,822 1,947 2,096 2,270 2,201 2,146 2,189 2,255 2,345 2,462

-15.1% 3.7% 8.2% 6.8% 7.7% 8.3% -3.00% -2.50% 2.00% 3.00% 4.00% 5.00%45.80% 45.70% 34.50% 22.50% 14.10% 9.30% 14.00% 15.00% 13.00% 10.00% 9.00% 8.00%

The three scenarios are presented graphically in Figure 1.21 below.

Pessimistic economic growth scenario for Romania

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

GDP OF ROMANIA - SHORT-TERM HISTORICAL AND FORECASTIN USD BILLIONS, 1999 - 2010

HISTORICAL 35.73 37.06 40.09 42.83 46.12 49.93

BASE CASE 52.80 55.84 59.05 62.44 66.03 69.83

BEST CASE 53.92 58.24 62.90 67.93 73.36 79.23

WORST CASE 48.43 47.22 48.16 49.61 51.59 54.17

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010



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Market Study

Project Component 1 - The main access road to the N-W industrial area Oradea - Bors

Project Component 1 has been developed in the context of a Local Economic Development Strategy for the Oradea Metropolitan Area. The Oradea Metropolitan Area currently consists of an association between the Municipality of Oradea, the municipalities of the communes of Bors, Sanmartin, Cetariu, Nojorid, Osorhei, Santandrei and Biharia and Bihor County Council. The association protocol stipulates the development of a harmonized urban planning policy, the cooperation between the chief architects’ offices from the member localities and the creation of a coordination body within the Metropolitan Area, the Metropolitan Cooperation Office – Real Estate Patrimony Administration.

Besides the main purpose to harmonize and coordinate the zoning policies, i.e. "correlate the General Urban Plan" at the level of the entire area, the association of the local public authorities making up the Metropolitan area has the following objectives:

Improve the living conditions, Increase the regional development level, Make the region attractive and accessible for economic development.

The underlying logic of the Metropolitan area is the pooling of resources for local economic development. The suburban communes generally have land available for development, a commodity that has become scarce and expensive in large cities such as Oradea. Conversely, the city has a relatively large, available, skilled labor force, something that is needed in order to attract Foreign Direct Investment and that is not readily available – not in significant numbers – in the suburban communes.

Essentially, the project component for the City of Oradea will consist of a facility (modernized road) needed in order to fulfill the goal and purpose of the creation of the Metropolitan Area: a modern access road in order to facilitate commuting of the labor force residing in the city to the industrial development area NW, situated in the Metropolitan Area, as well as general and local business-related road traffic.

The main market for the services provided by the project consists of companies, mostly production-oriented, located in the North-West Oradea Industrial Area, who will thus be able to benefit from improved access of current and prospective employees, residing in the central and southern sections of the city of Oradea, to the NW industrial Area, which is itself part of the Oradea Metropolitan Area. The specific of the targeted market segments are presented in section 3.4 below.

The Oradea Metropolitan Area

The Oradea Metropolitan Area has been formed for the specific purpose of pooling the resources of the local public administrations in the Oradea area in order to attract investment, create jobs and extend the local taxation base in order to finance and provide better services. The Oradea Metropolitan Area is composed of 8 localities with the following characteristics:

No. of inhabitants 242,1702 Administrative area 62,104 ha Inside area 15,221 ha

2 According to the 2002 census



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Land available for investments 837 ha

Summary of the Oradea Metropolitan Area

The Metropolitan Area was formed further to the protocol signed on February 2, 2001 by the mayors of the following localities: Oradea, Bors, Sanmartin, Cetariu, Nojorid, Osorhei, Santandrei, Biharia, validated / approved and completed by the following:

Local Council Decision no. 234 of July 25th, 2001 Protocol of July 24th, 2001 signed by the mayors of the following localities: Oradea, Bors,

Sanmartin, Cetariu, Nojorid, Osorhei, Santandrei, Biharia. Methodology for the Elaboration of the Urban Planning Documentation for the Metropolitan

Areas, developed in association with R.T.I.

1. ORADEA 206,614 inhabitants 11,556 ha / 7,719 ha Available 20 ha General Urban Plan approved1995 – revised 2001 2001 budget: ROL 1,027.47billion

2. BIHARIA 5,870 inhabitants – 6 VILLAGES 9,980 ha / 260 ha Available 10 ha General Urban Plan approved 19982001 budget: ROL 7.03 billion

3. BORS 3.409 inhabitants – 4 VILLAGES 4,200 ha / 295 ha Available 100 ha General Urban Plan approved1999 2001 budget: ROL 3.33 billion

4. CETARIU & PALEU 3.892 inhabitants – 7 VILLAGES 11,556 ha / 1,596 ha Available 50 ha General Urban Plan approved 19992001 budget: ROL 6.81 billion

5. NOJORID 4,594 inhabitants – 7 VILLAGES 9,436 ha / 3100 ha Available 15 ha General Urban Plan approved1999 2001 budget: ROL 5.83 billion

6. OSORHEI 5,887 inhabitants – 5 VILLAGES 6,492 ha / 589 ha Available 82 ha General Urban Plan approved 19972001 budget: ROL 6.23 billion

7. SANMARTIN 7,924 inhabitants – 7 VILLAGES 6,175 ha / 1,137 ha Available 540 ha General Urban Plan approved2000 2001 budget: ROL 17.4 billion

8. SANTANDREI 3,980 inhabitants – 2 VILLAGES 2,945 ha / 525 ha Available 20 ha General Urban Plan approved,revised 2000 2001 budget: ROL 6.6 billion



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Demographic Profile of the Oradea Metropolitan Area Population Distribution by Age, Oradea Metro Area

Population by Age GroupsOradea Metropolitan Area vs. Romania

0

5,000

10,000

15,000

20,000

25,000

0 – 4

5 – 9

10 –

14

15 –

19

20 –

24

25 –

29

30 –3

4

35 –

39

40 –

44

45 –

49

50 –

54

55 –

59

60 –

64

65 –

69

70 –

74

75 –

79

80 –

84 > 84

Grupe de Varsta

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Zona Metro Oradea Romania

The whole Oradea Metropolitan Area had a total population of 247,737 persons as per the census taken in 2002. The city of Oradea had at the time a total population of 206,614, with the remaining 41,123 living in the eight communes (Biharia, Bors, Breatca, Cetariu, Nojorid, Osorhei, Sanmartin si Santandrei) that have partnered up with the Municipality of Oradea for the creation of the Oradea Metropolitan Area.

The population distribution by age group reveals a better proportion of active age groups as compared with the national distribution, particularly in the young adults and middle-aged groups.

This is in itself indicative of the presence of good employment opportunities in Oradea.

The makeup of the population in the Metropolitan Area in terms of education presents the differences to be expected between rural and urban environments, but to a much lesser extent as compared with villages further away from a big city.

Demographics by Education, Oradea Metro Area

Oradea Metro Area Demographics by Education

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

MUN

ICIP

IUL

ORAD

EA

BIHA

RIA

BORS

BRAT

CA

CETA

RIU

NOJO

RID

OSOR

HEI

SANM

ARTI

N

SANT

ANDR

EI

University

Trade school (post-highschool)Highschool

Vocational (nohighschool)Grade school (8years)Elementary and noformal education

Oradea has a higher percentage of college and high school educated inhabitants as compared to all communes; however Sanmartin, Santandrei and to some extent Osorhei have large numbers of residents (over 40%) with vocational training or higher.



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In terms of employment, the Oradea Metropolitan Area presents some variation among the Occupational profiles of its inhabitants.

The City of Oradea has a broad range of occupations; some of the suburban communes, such as Cetariu and Bratca still have a large agricultural component, whereas agricultural activities have diminished significantly in the areas closer to the industrial zones (Santandrei) or to the tourism development areas (such as Sanmartin).

Active Population by Profession, Oradea Metro Area

Active Population in the Oradea Metro Area

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

MUNI

CIPI

ULOR

ADEA

BIHA

RIA

BORS

BRAT

CA

CETA

RIU

NOJO

RID

OSOR

HEI

SANM

ARTI

N

SANT

ANDR

EI

Management Professional Technical Administrative Services AgricultureArts and Crafts Skilled Labor Unskilled Labor Military Unemployed

Unemployment is low in the Oradea Metropolitan Area, and minimal in the City of Oradea; the unemployment rate for August was below 2%. Whatever unemployment exists is counted mostly among young graduates of local high schools and vocational training facilities, as they seek for and eventually manage to get their

Unemployment by Age Group, Oradea Metro Area



Page 64 of 97

first entry-level job.

Even in these categories the unemployment rates are below 12-13%, much lower compared with most other regions of Romania.

Unemployment in the Oradea Metro AreaPercentage of active population, bay age groups in 2003

0.0%

2.5%

5.0%

7.5%

10.0%

12.5%

15.0%

15 - 24 25 - 34 35 - 44 45-54 ani 55-64 ani > 65

Age Group

Unem

ploy

ed a

s %

of a

ge g

roup

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Oradea Zona Metro

Unemployment is also higher in the communes part of the Metropolitan Area, especially those with a more typically rural profile.

Even in these areas, as can be seen in Figure 3.5 to the right, unemployment has fallen significantly over the last three years, as a result of the dynamic pace of local economic growth.

Suburban Unemployment, Oradea Metro Area

Unemployment in Suburban Areas of Oradea

0

10

20

30

40

50

60

70

BIHARIA

BORS

CETARIU

NOJORID

OSORHEI

SANMARTIN

SANTANDREI

With Benefits 2001No benefits 2001With Benefits 2002No benefits 2002With Benefits 2003No benefits 2003

Economic Profile In terms of overall economic outlook, the Oradea Metro Area has experienced substantial growth over the last three years.

Size of Local Economy, Oradea Metro Area



Page 65 of 97

0

250

500

750

1,000

1,250

2001 2002 2003

Cummulative Reported RevenuePrivate Sector in the Oradea Metropolitan Area

Total Revenue Retail, Wholesale & Trade

The total overall income reported by local firms has increased from EUR 582 million in 2001 to more than EUR 1,261 million in 2003.

Some of the growth comes form trade and retail activities, but there is also significant growth in manufacturing, particularly in sectors with good multiplier effect and high value added.

Over 80 % of all economic activity in the manufacturing and other industrial sectors are physically located in the two industrial areas of the City of Oradea, the North-West and the South-East Industrial areas.

Evolution of Aggregate Revenue, Oradea Metro Area

Evolution of Total Reported RevenuePrivate Sector in the Oradea Metropolitan Area

0

200

400

600

800

1,000

1,200

1,400

2001 2002 20030

100

200

300

400

500

600

700

Total Revenue Retail, Wholesale & Trade

This physical layout of the Metro Area is highly conducive to the creation of economic clusters, as firms with

High-Impact Economic Growth Sectors, Oradea Metro Area



Page 66 of 97

similar and complementary competencies tend to congregate in order to achieve economies of scale and competency transfers.

Recent evidence indicates that clusters are beginning to form naturally in several sectors, such as CAEN 31 (electronic and optical equipment) and CAEN 34 (automotive components) where a number of local firms have found niches in integrating their

specialized products in major international brand producers’ value chain.

The main resource supporting this trend is a relatively large labor force with qualifications specific to the manufacturing sector. Human resources with technical qualifications are present in significant numbers in the Oradea Metropolitan Area, as shown in the following graphs.



Page 67 of 97

Availability of white collar manufacturing professionals, Oradea Metro Area (by occupational code)

Disponibilul de Specialisti in Zona Metro OradeaPregatire Universitara Specializari Tehnice

0

2

4

6

8

10

12

14

16

18

AR

HIT

EC

TI,

ING

INE

RI S

IA

SIM

ILA

TI (2

14)

MA

TEM

ATI

CIE

NI,

SP

EC

IALI

STI

STA

TIS

TIC

IEN

I SI

AS

IMIL

ATI

(212

)

SP

EC

IALI

STI

ININ

FOR

MA

TIC

A(2

13)

0

500

1000

1500

2000

2500

BIHARIABORSBRATCACETARIUNOJORIDOSORHEISANMARTINSANTANDREIMUNICIPIUL ORADEA

The number of professionals with technical specializations comes close to 3500 in Oradea, most of which specialize in engineering; the smaller communities of the Metro Area present similar profiles (with proportionally smaller numbers).

Availability of technical staff in manufacturing professions, Oradea Metro Area

Disponibilul de Specialisti in Zona Metro OradeaCadre Medii Specializari Tehnice

0

10

20

30

40

50

60

70

80

31 T

EH

NIC

IEN

IFI

ZIC

A S

ITE

HN

ICA

311

TEH

NIC

IEN

IFI

ZIC

A, C

HIM

IES

I TE

HN

ICA

312

OP

ER

ATO

RI S

ITE

HN

ICIE

NI

EC

HIP

AM

EN

TED

E C

ALC

UL

SI

RO

BO

TIIN

DU

STR

IALI

0

500

1000

1500

2000

2500

3000

3500

BIHARIABORSBRATCACETARIUNOJORIDOSORHEISANMARTINSANTANDREIMUNICIPIUL ORADEA

Technical personnel is also significantly represented in the Metro Area; technicians specialized in the manufacturing of mechanical and electrical components are the most numerous. The



Page 68 of 97

employers’ highest demand is for IT and robotics, area in which the supply, although substantial, is less plentiful.

Availability of skilled labor in manufacturing professions, Oradea Metro Area

Disponibilul de Specialisti in Zona Metro OradeaMuncitori Calificati Specializari Tehnice

0

50

100

150

200

250

300

350

72 M

ES

ER

IAS

I SI M

UN

CIT

OR

IC

ALI

FIC

ATI

IN M

ETA

LUR

GIE

,C

ON

STR

UC

TII M

ETA

LIC

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IA

SIM

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TI

731

LUC

RA

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I IN

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CA

NIC

AFI

NA

SI A

SIM

ILA

TI

81 O

PE

RA

TOR

I LA

INS

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SI

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IMIL

ATI

82 O

PE

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AM

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EN

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I ALT

EP

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DU

SE

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000 BIHARIABORSBRATCACETARIUNOJORIDOSORHEISANMARTINSANTANDREIMUNICIPIUL ORADEA

Skilled labor is also widely available, particularly metal work, machinists and assembly workers.

Average labor cost to employers by type of economic sector, Oradea Metro Area

Nivelul Mediu de Venit pe Grup de Sectoare EconomiceIn Zona Metropolitana Oradea

0

20

40

60

80

100

120

140

160

180

Man

a de

lucr

u

Res

urse

Nat

ural

e

Res

urse

&ec

onom

ii de

scar

a

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w-h

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Sca

ra &

Kno

w-h

ow

Euro

pe

Luna

, ven

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200120022003



Page 69 of 97

As related to the levels of skill widely available in the labor supply, the cost of labor to the employers is still remarkably low, both in Romania overall and in the Oradea Metro area. Figure 3.12 above shows the average (real) cost of labor in several local industries over the last three years.

Project Component 2 - County road connecting the agricultural areas in the Cluj county to the marketing and processing centers in Cluj Napoca

Unlike project component 1 where the primary objective is to feed the growth of an existing, dynamic industrial development by providing for better access of the labor force, customers and suppliers, the target of project component 2 is the rural area south-east of the city of Cluj Napoca. Although situated geographically in the peri-urban perimeter of a large city, the target area is economically underdeveloped, with little economic activity, even less employment and few options. The purpose of the project in this area is to provide the transportation infrastructure needed in order to jump-start the development of economic enterprise (building on what the subsistence farmers living in the area know how to do best: agriculture), by rehabilitating existing roads and building a new section of road that would provide for the agricultural producers in the area the needed access way to the new marketing center in Apahida and to other processing facilities / markets in the city of Cluj-Napoca.

Demographics of Cluj County

The population of Cluj County, amounting to 681,338 persons in 2002, presents distinct profiles for urban and rural environments. In the urban centers – of which Cluj-Napoca is by far the largest – the active population profile resembles that of the city of Oradea – the adult and middle aged groups are found in higher proportions as compared with the national distribution. Cluj County also has one of the highest percentages of urban population in Romania (66% to 34% rural), as compared to a national average of 55%.

Population Distribution by Age Group, Cluj County

POPULATION DISTRIBUTION BY AGE GROUP

05,000

10,00015,00020,00025,00030,00035,00040,00045,000

0 – 4

5 – 9

10 –

1415

– 19

20 –

2425

– 29

30

–34

35 –

3940

– 44

45 –

49

50 –

54

55 –

59

60 –

6465

– 69

70

– 74

75

– 79

80

– 84

> 8

4

Age Groups

Num

ber o

f per

sons

(Clu

j Co

unty

)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Num

ber o

f per

sons

(Nat

iona

lly)

Cluj County - Rural Cluj County - Urban Romania

Rural Cluj County presents higher proportions of young and elderly groups.

Overall, the urban trend indicates the same low unemployment encountered in the City of Oradea.

Education demographics are also favorable to planned economic development, as the overall county population has, in proportion of

Education Demographics, Cluj County



Page 70 of 97

almost 60%, at least a vocational or high school education. EDUCATION DEMOGRAPHICS IN CLUJ COUNTY

27%

17%2%

24%

16%

4%10% University

Trade school (post-highschool)

Highschool

Vocational (no highschool)

Grade school (8 years)

Elementary (4 years)

No formal education

Unemployment, although low in the cities and particularly in Cluj-Napoca (under 4% in 2003), is relatively high throughout the county.

Although the overall numbers have decreased since 2001, the structure has not improved; just the opposite, the number of unemployed with no financial assistance has increased, as has the number of unemployed persons on social assistance. The number of unemployed in re-conversion and re-training programs has however increased.

Unemployment in Cluj County

17,405

13,528

546

5,208

9,612

23,545

902

4,208

7,184

17,628

928

3,528

4,377

11,278

1,100

0

4,000

8,000

12,000

16,000

20,000

24,000

Num

ber

of U

nem

ploy

ed P

erso

ns

2001 2002 2003 2004 3Q

UNEMPLOYMENT IN CLUJ COUNTY

Unemployed on Social Assistance Unemployed on Unemployment AssistanceUnemployed with no financial assistance Unemployed in re-conversion / re-training



Page 71 of 97

TYPE OF UNEMPLOYMENT 2001 2002 2003 2004

Unemployed on Unemployment Assistance 17,405 9,612 7,184 4,377

Unemployed on Social Assistance - 5,208 4,208 3,528

Unemployed with no financial assistance 13,528 23,545 17,628 11,278

Unemployed in re-conversion / re-training 546 902 928 1,100

Total 31,479 39,267 29,948 20,283

Peri-urban rural areas are particularly affected by high unemployment rates in the county, situation which is made worse if poor transportation infrastructure does not allow the villagers to bring their agricultural products surplus to market in the city.

The labor demographics of Cluj County show a remarkably similar percentage of skilled and unskilled laborers in both rural and urban areas (which means there is a lot of daily commuting going on from rural to urban areas). Arts and crafts are developed in the countryside, with little services and technical work taking place in the rural environment as well. Agriculture is however the main occupation of at least 40% of the labor force living in the rural environment.

Labor Demographics in Cluj County

LABOR DEMOGRAPHICS IN CLUJ COUNTY - RELATIVE

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CLUJ-N

APOCA

ALL URBAN

ALL RURAL

Unskilled Labor

Skilled Labor

Arts & Crafts

Agricultural

Services

Administrative

Technical

Professional

Management

Economic Profile of Cluj County and the city of Cluj-Napoca

The economy of Cluj County has grown solidly over the last three years, from cca. EUR 2,3 billion in 2001 to over 3,08 billion in 2003. Of this overall amount, the city of Cluj-Napoca amounts for between 1,78 billion in 2001 to over EUR 2,43 billion in 2003.



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Business Growth Rates, Cluj County

2002

2003

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%

40.0%

45.0%

Total Reported Revenue Growth RatePrivate Sector in Cluj County

Cluj County City of Cluj-Napoca

Relative Size of Local Economy, Cluj County

0

500

1,000

1,500

2,000

2,500

3,000

EUR

Mill

ions

2001 2002 2003

Cummulative Reported RevenuePrivate Sector in Cluj County

Cluj County City of Cluj-Napoca

As the economy of both Cluj County and the City of Cluj-Napoca have grown substantially over the past three years, the growth rate has decreased from a cumulated total of nearly 45% to a more manageable 20%. Still, the local revenue growth rates are high.

The local economy in the project area situated just south of the City of Cluj-Napoca, comprising of the villages of Aiton, Boju, Cara, Ceanu Mic, Cojocna, Crairit, Dezmir, Gheorghieni, Martinesti, Pata, Ploscos, Rediu, Tureni, Valcele, Valea Florilor, which are either crossed by, or are in the relative proximity of the local project road (the project area is presented in Drawing C 23 in Volume III) has also evolved positively, albeit at more modest rates – and net numbers.

Business Growth Rates, Project Area

2002

2003

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Growth RatesPrivate Sector in Project Area of Cluj County

Total Reported Revenue Number of Companies

Evolution of Revenue, Project Area

Evolution of Total Reported RevenuePrivate Sector in Project Area of Cluj County

0

200

400

600

800

1,000

1,200

1,400

2001 2002 20030

10

20

30

40

50

60

70

80

Total Reported Revenue Number of Companies

The number of local firms has increased from 57 in 2001 to 67 in 2003, while the (fiscally reported) total revenue of all private companies in the project area has increased from 943 thousand EUR to EUR 1,29 million.

Essentially, by far the main economic activity in the he project area is agriculture. The main crops are corn, wheat, potatoes, and a substantial variety of produce and fruit – apples, plums and pears in particular.

Absent a proper acquisition / distribution system for agricultural products, much of the local population is primarily involved in subsistence agriculture, with some of the produce in excess of the villagers’ needs



Page 73 of 97

seeping into the markets in Cluj Napoca and elsewhere in small quantities, inefficiently transported and distributed. Much of the remaining excess production is converted locally, either as fodder in the case of corn, or by way of bootleg distilleries, as is the case with fruit, particularly plums.

The Cluj County Council has already taken one major step in addressing the issue of efficient logistics for the transportation and distribution of agricultural products, by launching, with EU Phare assistance, an agricultural products marketing center in the commune of Apahida, just east of Cluj Napoca.

The Marketing Center solves the problem of distribution of agricultural goods in the project area, by putting under the same roof the supplies of vegetable products, fruits, flowers, meat products, fish, dairy products needed for local consumption in the the city of Cluj-Napoca. Processors, local distributors and exporters now have a convenient place to one-stop-shop.

This does not however solve the logistical problems of acquisition and transportation: on one hand, the local farmers have to carry their own products to the marketing center. This leads to substantial inefficiencies in transportation logistics, as the smaller size loads are the most expensive and least efficient in terms of transportation costs. Moreover, a substantial area south of the Boju village simply does not have the possibility to access the Apahida Marketing center in bad weather, due to the absence of a paved road linking (conveniently, without large detours) their villages to Apahida and Cluj-Napoca.

Hence the necessity and opportunity of Project Component 2. As for the need for efficient transportation logistics, the Consultant estimates that, once the road is in pace, private entrepreneurship in the transportation sector will seize the opportunity to offer the loading of agricultural products at the producer’s property (right off the field ) ant its transportation to the Marketing Center, as a competitively priced service.


Contract # 07149 – “Access ways for Development in the two Main Economic Canters of the North-West Region” Page 74 of 97

ECONOMIC PROFILES OF THE CITY OF ORADEA, THE CLUJ COUNTY AND THE PROJECT AREA IN CLUJ COUNTY

The City of Oradea

Parameter Total Oradea Metro Area Total Oradea Metro Area Total Oradea Metro AreaNumber of Companies (filed financial reports) 11,471 10,067 1,404 12,230 10,764 1,466 12,711 11,232 1,479Growth rates 6.6% 6.9% 4.4% 3.9% 4.3% 0.9%Total reported revenue, billion ROL 15,403 14,147 1,257 34,187 30,930 3,258 48,167 44,096 4,071FX rate ROL/EURTotal reported revenue, 000 000 EUR 592 544 48 1,094 990 104 1,283 1,174 108Representing, per annum 91.8% 8.2% 90.5% 9.5% 91.5% 8.5%Growth rates 84.8% 82.1% 115.9% 17.3% 18.7% 4.0%

2001 2002 2003

26,026 31,255 37,555

Cluj County and the Project Area in Cluj County

Exchange rate ROL/EUR

Parameter Total Cluj-Napoca Other Cluj County Total Cluj-Napoca Other Cluj

County Total Cluj-Napoca Other Cluj County

Number of Companies (filed financial reports) 17,808 11,880 5,928 18,904 12,742 6,162 21,508 14,763 6,745Wages paid by private sector - 000 EUR 216,535 161,346 55,189 230,083 173,140 56,943 240,591 180,794 59,797

No. of employees N/A N/A N/A 132,513 94,464 38,049 142,417 101,168 41,249Total reported revenue, 000 EUR 2,330,164 1,769,677 560,487 2,781,767 2,188,479 593,288 3,080,383 2,434,149 646,233Average Salary Cost / Employee EUR/month 144.7 152.7 124.7 140.8 148.9 120.8

Number of Companies (filed financial reports) 57 61 67Wages paid by private sector - 000 EUR 79 75 95

No. of employees N/A 71 111Total reported revenue, 000 EUR 943 1,290Average Salary Cost / Employee EUR/month

N/A

N/A 88.2 71.2

617571

1,060 1,290

PROJECT AREA - villages of Aiton, Boju, Cara, Ceanu Mic, Cojocna, Crairit, Dezmir, Gheorghieni, Martinesti, Pata, Ploscos, Rediu, Tureni, Valcele, Valea Florilor5779N/A 111943

2001 2002 200326,026 31,255 37,555

CLUJ COUNTY

6795



Analysis of Competitors

Possible competing solutions for component 1 include:

The extension of public transportation, with more routes, increased number of runs, and more vehicles. This would not address, much less solve, the traffic flow problem faced bu commuters to the industrial area, as itineraries through the narrower streets of the residential areas are not practicable and most commuters will probably continue to use their automobiles.

The construction of a true beltway around the southern part of the city of Oradea, giving the existing traffic routes a wide berth. Although desirable, this solution is impracticable for two reasons: first, the beltway would have to cross several rail lines and the Crisul Repede River, which would bring costs up to a very high level, and secondly, such an investment may not prove justified after 2012, when pursuant to the opening of the Oradea-Cluj-Brasov freeway, through traffic will decrease.

For component 2, the main competing alternatives are:

The “do nothing” option, which would obviously not address the existing problems (lack of connecting road, lack of economic development in the project area and continuously growing disparities between the urban environment in the city of Cluj-Napoca and the rural area in the immediate vicinity.

A more limited version of the project, whereby only the new section of road between Aiton and Boju will be constructed. This alternative has been examined in terms of traffic flow and estimative budget: it would only cost EUR 1,6 million, but it would also leave the remaining 22.6 km of the proposed itinerary in poor and continuously degrading condition. This will both impede the traffic flow after completion of the (reduced version) project and would require higher investment values later on in order to remedy further degradation. Of the existing road sections.

A different itinerary for the proposed component. One option has been explored and rejected due to higher costs and lesser economic impact.


Contract # 07149 – “Access ways for Development in the Two Main Economic Canters of the North-West Region”

Page 76 of 97

ECONOMIC ANALYSIS Objectives of the Analysis

Primary objective of the Feasibility Study phase is to assess and analyze the existing situation, the need for implementing the proposed measure based on the current and forecasted needs of the population and in relation to the ability of the local community to sustain the project.

In this regard, the purpose of the financial analysis during the Feasibility Study phase is to assist and corroborate in the identification of the optimal technical solution as a function of costs.

Theoretical optimal technical solution

The ideal (theoretical) approach shown in Figure 7.1, from an economic standpoint, would involve the quantification of benefits for each possible technical solution and the identification of the maximum distance point between the cost and the benefits functions. Due to the high number of variables involved, this approach is impractical.

Another aspect to be taken into account is the fact that, due to the “public goods3” nature of the objective, the project does not generate cash flow directly attributable to the investment.

Also, the relatively short technical life of the investment (five years before re-surfacing, in itself another investment) and the lack of a generally accepted standard (present roads are in bad condition as compared to what?) makes a discounted cash flow based on opportunity cost a less than relevant proposition.

The consultant therefore considers that the most relevant form of analysis for decision support is the model based on financial costs and economic benefits, presented below.

3 “Public goods”, as an economic term, refers to goods and services for which, due to their nature, resource allocation cannot be made through market mechanisms – i.e. goods for which the user’s utility is not contingent upon payment. National defense and public works are classical examples: every resident does enjoy their benefits, whether they contribute to covering their costs - or not.



Page 77 of 97

Component 1, -„Primary access road to the industrial area North-West Oradea – Bors” Assessment of Economic Benefits

The assessment of economic benefits has been performed based on current international norms in the financial industry, using assumptions in line with local income, labor cost and market prices.

Assumptions

Number of vehicles on the project road, expressed as total daily average per year, starts in 2005 with the current estimated figures of 2,486 standard vehicles. The figures are based on the Search study and on the consultant’s own findings. It is further assumed that the number of vehicles will increase by 5% until 2011, which is consistent with the Search study’s forecast when the new freeway Oradea – Brasov will likely begin operating; at that time, the new freeway will, based on current estimates of local vs. through traffic on the project road, pull an estimated 30% of the local traffic off the project road, thus decreasing local traffic. This will occur over two years, 2012 and 2013. The consultant further assumes that local traffic on the project road will from that point on increase by an estimated 3% to 5% for the following 15 years, due to increased local automobile ownership and increase in local business activity. All costs and benefits are calculated on a yearly basis.

The main quantifiable economic benefits are computed as follows: Savings on repairs of other city roads. Traffic channeled on project road will reduce

wear and tear on other city roads, resulting in savings on repair costs. The estimate is based on an average cost of maintaining main city roads (in average condition) of EUR 6 thousand per km per year, which applies to over 19 km of main city roads where traffic is eased by the project road. The further assumption is that cca. 1/3rd of the traffic of those main arteries in the city of Oradea is relieved by the project road, and therefore 1/3rd of the maintenance costs are saved through the implementation of the project. The savings are therefore of EUR 34.200 the first year, adjusted for inflation thereafter.

Time savings for (all) motorists, amounting to one hour per standard vehicle per week, i.e. 1,45 minutes per standard vehicle per km. The computation takes into account the dayly average per year axpressed in standard vehicles, a length of project component 1 of 5,9 km, the time saved quantified at the average monthly salary of EUR 146 = 84,23 Euro-cents per hour (with a growth rate of 8% per year until 2012, 5% per year thereafter), resulting in a time savings of 8,57 minutes per average vehicle on the project road, i.e . 12 Euro Cents per average vehicle on the project road per day. As the time saved on the project road can be valued as work time or taking work time as opportunity cost for leasure time, the same value of time is applied across the board to all time saved.

Value of improved traffic safety. According to the Oradea Traffic Police, over the last 2 years, and average of 15 accidents involving fatalities have occurred on the project road. Although the loss of human life is in itself a significant social cost, for the purposes of quantifying the social benefits of the project, it can be assumed that, given an average age of the fatalities around 40 years of age, each victim would have had another at least 20 years of productive life. The loss of one productive individual (which is the case with most drivers) to the local economy will at least amount to the value of his/her wages over the remainder of their productive life, based on the national average income of EUR 146 per month = EUR 35.040. The overall estimate of this tragic social cost is calculated based on the Search study which amounts to 1 accident involving fatalities cca. 450.000 TDA vehicles (446,638).

Noise reduction, estimated at 5,7 Euro / 1000 passengers/km (taking into account the average standard vehicles and a length of project component 1 of 5,9 km), leading to an average savings of 3,36 Euro Cents per average vehicle on the project road per day.



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Reduction in air pollution, estimated at 17,3 Euro / 1000 passengers/km (taking into account the average standard vehicles and a length of project component 1 of 5,9 km), leading to an average savings of 10,21 Euro Cents per average vehicle on the project road per day.

Benefits resulting from reduced impact on climate change, estimated at 15,9 Euro / 1000 passengers/km (taking into account the average standard vehicles and a length of project component 1 of 5,9 km), leading to an average savings of 9,38 Euro Cents per average vehicle on the project road per day.

The main quantifiable economic costs are computed as follows: Road maintenance and repair, cleaning, snow removal etc. every year valued as follows:

Maintenance and repair costs for Project Component 1, in EURO.

Service Provider

TOTAL S.C. Drumuri Orasenesti

R.E.R. Ecologic

S.C. Apa-Canal

Luxten Lighting

Maintenance Cleaning Storm runoff Lighting

2008 55,778 35,495 2,389 4,854 13,040

2009 78,019 57,330 2,437 4,951 13,301

2010 139,417 118,315 2,485 5,050 13,567

2011 145,755 124,231 2,535 5,151 13,838

2012 152,397 130,442 2,586 5,254 14,115

2013 159,358 136,964 2,638 5,359 14,397

2014 166,654 143,813 2,690 5,466 14,685

2015 174,302 151,003 2,744 5,576 14,979

2016 182,317 158,553 2,799 5,687 15,278

2017 190,721 166,481 2,855 5,801 15,584

2018 199,530 174,805 2,912 5,917 15,896

2019 208,764 183,545 2,970 6,035 16,214

2020 218,447 192,723 3,030 6,156 16,538

2021 228,597 202,359 3,090 6,279 16,869

2022 239,240 212,477 3,152 6,405 17,206

2023 250,399 223,101 3,215 6,533 17,550

2024 262,100 234,256 3,279 6,664 17,901

2025 273,604 245,203 3,345 6,797 18,260

2026 285,630 256,661 3,411 6,932 18,626

2027 298,204 268,654 3,480 7,070 19,000

2028 311,349 281,209 3,549 7,211 19,381

2029 325,093 294,349 3,620 7,354 19,769

2030 339,463 308,104 3,693 7,501 20,166

Road resurfacing every seven years, with the standard (for this type of road) 7cm of binder (BAD 29) and 4 cm of asphalt (BA16). On a toatal surface of the project road of 61.950 m2, the cost of re-surfacing is EUR 4.547.130 adjusted for inflation.

Investment costs are based on market prices and industry norms.

Given the nature of the project, there are no (financial) revenue sztreams and no annual operational costs and / or overheads/

The forecast based on one data point of quantified economic benefits is presented on the following page.



ECONOMIC ANALYSIS

COSTS AND BENEFITS OF PROJECT COMPONENT 1, ADJUSTED FOR EXTERNALITIES

25 YEAR FORECAST

Quantified benefits forecast, project component 1 - ORADEA

No. of Vehicles Savings from Reduced TOTAL QUANTIFYABLE NET BENEFITSTotal daily repairs of other Time savings Noise Reduction in impact on TOTAL Road Road INVESTMENTS

Inflation Inflation average TOTAL city roads @ labor cost Safety Reduction air pollution climate change EXPENSES Maintenance Re-surfacing NET CASH & ECONYEAR Rate Index per year BENEFITS 34,200€ 0.1203€ 35,040€ 0.0336€ 0.1021€ 0.0938€ EUR 73,4 / sqm VALUE FLOW

2006 0.08 1.08 0 0 0 0 0 0 0 0 3,636,220 -3,636,2202007 0.08 1.16 0 0 0 0 0 0 0 0 3,636,220 -3,636,2202008 0.07 1.23 2,486 794,328 8,550 460,011 70,655 37,382 113,456 104,275 13,750 13,750 780,578 780,5782009 0.07 1.29 2,486 2,883,026 44,118 2,499,603 70,655 39,365 119,476 109,808 55,778 55,778 2,827,248 2,827,2482010 0.06 1.35 2,610 3,153,092 46,170 2,737,532 74,188 43,256 131,285 120,661 139,417 139,417 3,013,675 3,013,6752011 0.06 1.41 2,741 3,413,672 48,051 2,965,134 77,898 47,269 143,465 131,855 145,755 145,755 3,267,917 3,267,9172012 0.05 1.46 2,302 3,575,745 49,761 3,179,931 65,434 41,119 124,800 114,700 152,397 152,397 3,423,348 3,423,3482013 0.05 1.50 1,934 3,728,944 51,300 3,379,669 54,965 35,608 108,074 99,328 159,358 159,358 3,569,586 3,569,5862014 0.04 1.54 1,992 3,928,578 52,668 3,562,322 56,613 37,654 114,284 105,036 7,169,234 166,654 7,002,580 -3,240,656 -3,240,6562015 0.04 1.58 2,052 4,133,688 54,036 3,749,781 58,312 39,791 120,770 110,997 174,302 174,302 3,959,386 3,959,3862016 0.04 1.62 2,113 4,344,299 55,404 3,942,046 60,061 42,023 127,543 117,221 182,317 182,317 4,161,982 4,161,9822017 0.04 1.66 2,177 4,560,438 56,772 4,139,119 61,863 44,352 134,613 123,719 190,721 190,721 4,369,717 4,369,7172018 0.04 1.70 2,242 4,782,134 58,140 4,340,998 63,719 46,784 141,992 130,501 199,530 199,530 4,582,604 4,582,6042019 0.04 1.74 2,309 5,009,415 59,508 4,547,683 65,631 49,321 149,693 137,579 208,764 208,764 4,800,651 4,800,6512020 0.04 1.78 2,378 5,242,312 60,876 4,759,175 67,599 51,968 157,728 144,964 218,447 218,447 5,023,865 5,023,8652021 0.04 1.82 2,450 5,480,855 62,244 4,975,474 69,627 54,730 166,111 152,669 8,504,374 228,597 8,275,777 -3,023,518 -3,023,5182022 0.04 1.86 2,523 5,725,078 63,612 5,196,580 71,716 57,611 174,855 160,705 239,240 239,240 5,485,838 5,485,8382023 0.04 1.90 2,599 5,975,014 64,980 5,422,492 73,868 60,616 183,973 169,085 250,399 250,399 5,724,615 5,724,6152024 0.04 1.94 2,677 6,230,697 66,348 5,653,211 76,084 63,748 193,482 177,824 262,100 262,100 5,968,597 5,968,5972025 0.04 1.98 2,757 6,492,164 67,716 5,888,736 78,366 67,015 203,395 186,936 273,604 273,604 6,218,560 6,218,5602026 0.04 2.02 2,840 6,759,452 69,084 6,129,068 80,717 70,420 213,730 196,434 285,630 285,630 6,473,822 6,473,8222027 0.04 2.06 2,925 7,032,600 70,452 6,374,207 83,139 73,968 224,501 206,333 298,204 298,204 6,734,396 6,734,3962028 0.04 2.10 3,013 7,311,647 71,820 6,624,152 85,633 77,667 235,726 216,650 9,860,322 311,349 9,548,973 -2,548,675 -2,548,6752029 0.04 2.14 3,103 7,596,636 73,188 6,878,904 88,202 81,521 247,422 227,400 325,093 325,093 7,271,543 7,271,5432030 0.04 2.18 3,196 7,887,610 74,556 7,138,463 90,848 85,536 259,608 238,600 339,463 339,463 7,548,147 7,548,147



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DCF and financial ratios for quantified benefits forecast, project Component 1 - ORADEA QUANTIFIABLE BENEFITS

DISCOUNTED BENEFITS @6.0%INVESTMENTS

NET "ECF"YEAR

2006 0 0 3,636,220 -3,636,2202007 0 0 3,636,220 -3,636,2202008 780,578 655,389 0 655,3892009 2,827,248 2,239,445 0 2,239,4452010 3,013,675 2,251,993 0 2,251,9932011 3,267,917 2,303,753 0 2,303,7532012 3,423,348 2,276,722 0 2,276,7222013 3,569,586 2,239,602 0 2,239,6022014 -3,240,656 -1,918,139 0 -1,918,1392015 3,959,386 2,210,900 0 2,210,9002016 4,161,982 2,192,480 0 2,192,4802017 4,369,717 2,171,615 0 2,171,6152018 4,582,604 2,148,503 0 2,148,5032019 4,800,651 2,123,333 0 2,123,3332020 5,023,865 2,096,283 0 2,096,2832021 -3,023,518 -1,190,197 0 -1,190,1972022 5,485,838 2,037,245 0 2,037,2452023 5,724,615 2,005,583 0 2,005,5832024 5,968,597 1,972,699 0 1,972,6992025 6,218,560 1,938,976 0 1,938,9762026 6,473,822 2,018,568 0 2,018,5682027 6,734,396 2,099,816 0 2,099,8162028 -2,548,675 -794,689 0 -794,6892029 7,271,543 2,267,302 0 2,267,3022030 7,548,147 2,353,548 0 2,353,548

ENPV PROJE 22,483,748ERR 29.3%E B/C 3.14

PROJECT COMPONENT IECONOMIC COSTS AND BENEFITS

-4

-2

0

2

4

6

8

10

12

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Mill

ions

Benefits Costs Net economic costs & benefits



Economic Ratios Calculations

The calculation of the economic internal rate of return and cost-benefits ratio are presented in table 6.2 above. In the absence of direct revenues, economic benefits had been quantified and brought into the DCF analysis in order to offset investment and maintenance expenditures. The quantification of the project benefits reveals an ENPV for the project of EUR 22,5 million over 25 years. The economic IRR (ERR) is 29.3% , and the economic benefit / cost ratio is 3,14, which means the projects’ benefits (including socio-economic externalities) amount to over 3 Euro for every 1 Euro invested and/or spent as costs. Taking into account the type of project, the ratios presented indicate a good cost-benefit report in the case of this project component.

Sensitivity analysis

The main benefit of the project is the time savings realized from improved traffic on the project road, which alone amounts to more than 80% of the quantifiable benefits. A reduction of those benefits as a result of rapid increases in traffic which would more than offset increased traffic fluency resuting from the project would result in a substantial decrease in the project economic ratios; thus, a 50% reduction in time savings (a “pessimistic” or “worse case” scenario which is outside the traffic flows forecasted) would result in the following ratios:

ENPV PROJECT COMPONENT 1 5,736,325

ERR 16.2%

E B/C 1.74

Converseley, assuming that the future freeway will draw 45% of the local traffic (instead of 30% as forecasted, an “optimistic” or “best case” scenario which is again outside the current forecast), and the resulting de-congestion of traffic would not be offset by increased local vehicle ownership, the following ratios:


ERR 45%

E B/C 4.61

More importantly, from a non-quantitative perspective (because putting a value on human life is by definition arbitrary and perhaps a bit insensitive), the social benefit of eliminating a large part of the accidents with fatalities from the project road is highly significant.

All other quantifiable benefits come within the 30 thousand to 250.000 EUR range. None of the key variables (noise reduction, reduction in air pollution, reduction to contribution to climate change, the percentage of traffic that will be diverted to the future freeway) can, within a 15-20% variance, have even a proportional – much less a dramatic – impact on the financial projections.

For the purposes of the sensitivity analysis of Project Component 1, the model presented in tables 6.5 and 6.6 (as a point estimate) has been employed in performing a Monte Carlo simulation, with input parameters derived from the traffic studies described herein and from the three economic scenarios shown in section 3.3.3. method. Upon several trial runs it has been observed that convergence occurs in the model at around 8.000 iterations; consequently, for the final results, the simulation was run for 10.000 iterations, with the following results:



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Probability Distribution for ENPV, project component 1

As Shown in Figure 6.3, the economic net present value of the project is positive even under the worst case scenario. The expected most likely value is 23,6 million Euro.

Probability Distribution for ERR, project component 1

The range of probable outcomes for ERR for project component 1, with 90% certainty, is between 16% and 45% with a most likely outcome of EIRR=32%, values that show the project to be a good investment with relatively low opportunity costs.

The sensitivity analysis reveals a relatively low sensitivity of the project to changes in the macroeconomic environment. The opportunity and necessity of the project in the local community is strong under most macroeconomic conditions, which is consistent with this type of objective.



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Component 2 - County road connecting the agricultural areas in the Cluj county to the marketing and processing centers in the city of Cluj Napoca Assessment of Economic Benefits

Assumptions

The new road will divert 25% to 30% of the through traffic between DN1 and DN1C, going through Cluj Napoca, in the first year. It will continue to serve as a bypass road for this traffic until 2012, when as the beltway of Cluj-Napoca will be completed, its importance as a bypass road will diminish. The number of vehicles on the DN1 – DN1C corridor, expressed as total daily average per year, will start in 2008 with the currently estimated figures of cca 14.000 TDA (14.218 standard vehicles according to the CESTRIN forecast of 2000). It is further assumed that the number of TDA vehicles will increase by 3% to 5% until 2012, when the new freeway Oradea – Brasov will likely begin operating; at that time, the new freeway will, based on current estimates of local vs. through traffic on the project road, pull an estimated 50% to 60% of the long distance traffic off DN1; the traffic pattern on DN1C will change, shifting towards accessing the freeway, which will initially decrease traffic on the project road. This however will have little effect on local traffic originating from the project road area. The consultant also assumes that local traffic on the project road will from that point on increase by an estimated 2% to 4% for the following years, due to increased local automobile ownership and increase in local business / tourist activity.

The main quantifiable economic benefits are computed as follows: Farmers' access to markets. The project road will be completed on schedule, in October 2007.

Once in use, the new road will attract 4000 farmers to the marketing center and other business destinations in Cluj-Napoca in the first year, with that number doubling over the following two years. Based on assessed values of the average load carried by local villagers to markets (mostly by means of Dacia cars and pick-up trucks and Aro 4X4’s), the average value of one transaction conducted by the farmers averages around EUR 200, also in the first year. Both will increase in subsequent years , by an estimated 2% to 4%.

Fuel savings. Assuming that the project road will divert 1/3rd of the traffic on the DN1 – DN1C corridor, knowing that the project road is shorter with 5,4 km (24,2 km on the project road as opposed to 29,6 km on DN1 – DN1C), and taking into account an average of 25 minutes of idling in heavy traffic while crossing the city of Cluj, the consultant estimates that every vehicle traveling on the project road will save an average ½ liter of fuel per trip. Fuel is computed at an average cost of 80 Euro-cents per liter..

Local tourism. Tourist traffic is not correlated to the flows of TDA vehicles, neither as they relate to local traffic, nor as they relate to through traffic. It is rather a function of proper marketing of rural tourism, of the quality of the services provided and of the length of time the services have been provided (the latter two being the main determinants for the number of referrals and repeat business). Assuming the initiation and sustained implementation of a rural tourism program at the same time the project road is completed, the projection is based on a number of 150 vehicles bringing 330 visitors into the project area in the kick-off year, each spending an average of three days at an average expenditure of EUR 135 per vehicle per day (lodging, meals and shopping). The expected growth rate will be 15% per year for the duration of the forecast.

Time savings for motorists taking the project road, amounting to ¾ of an hour per motorist per trip. Quantified at average salary market value, with a growth rate of 8% per year until 2012, 5% per year thereafter.

Value of improved traffic safety. According to the Cluj County Traffic Police, over the last 3 years, and average of 7.3 accidents per year have occurred on the Feleacu hill, resulting on an average of 3,7 fatalities and 9,7 wounded per year. For the purposes of quantifying the social benefits of the project, it can be assumed that, given an average age of the fatalities around 40 years of age, each victim would have had another at least 20 years of productive life. The loss of one productive individual (which is the case with most drivers) to the local economy



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will at least amount to the value of his/her wages over the remainder of their productive life, based on the national average income of EUR 146 per month = EUR 35.040. This social cost occurs as 1 accident involving fatalities cca. 925.000 TDA vehicles (924,289). The quantifiable social costs of persons injured in traffic accidents (1 at cca. 350.000 TDA vehicles) is approximated at 3.138 EUR, which includes an average of 20 days of hospitalization at EUR 135 per day and three months’ worth of lost wages (EUR 146*3). Furthermore, each road accident (one occurrence at 468,475 TDA vehicles) incurs material losses in the form of damaged property, amounting to EUR 4000 on the average.

The costs for road maintenance and repair are computed as an average of EUR 2.800 per km.

Investment costs, presented net of VAT, are based on market prices and industry norms.

Given the nature of the project, there are no annual cash revenues nor are there operational costs and / or overheads.

A forecast of quantified economic benefits is presented on the following page.



ECONOMIC ANALYSIS

COSTS AND BENEFITS OF PROJECT COMPONENT 2, ADJUSTED FOR EXTERNALITIES

25 YEAR FORECAST

Quantified benefits forecast, project component 2 – CLUJ COUNTY

Road MaintenanceNo. of Vehicles TOTAL QUANTIFYABLE NET BENEFITS

Total daily Farmers' access Local TOTAL INVESTMENTSInflation Inflation average TOTAL to market Fuel savings Tourism Time savings Safety EXPENSES NET CASH & ECON

YEAR Rate Index per year BENEFITS 200€ 0.80€ 85€ 0.84€ € 67,760 VALUE FLOW2006 0.08 1.08 0 0 0 0 0 0 0 5,858,378 0 5,858,378 -5,858,3782007 0.08 1.16 0 0 0 0 0 0 0 5,858,378 0 5,858,378 -5,858,3782008 0.07 1.23 1,167 1,150,958 400,000 170,333 20,250 269,012 291,363 5,941,384 83,006 1,150,958 5,858,378 -4,707,4202009 0.07 1.29 4,807 2,776,603 643,108 701,774 23,288 1,108,330 300,104 87,410 87,410 2,689,193 2,689,1932010 0.06 1.35 4,951 3,127,983 927,689 722,827 26,781 1,141,580 309,107 91,476 91,476 3,036,507 3,036,5072011 0.06 1.41 5,198 3,281,435 974,630 758,968 30,798 1,198,659 318,380 95,203 95,203 3,186,232 3,186,2322012 0.05 1.46 5,302 3,328,253 975,196 774,148 35,417 1,222,632 320,860 98,591 98,591 3,229,662 3,229,6622013 0.05 1.50 4,772 3,041,722 1,020,541 696,733 40,730 1,100,369 183,349 101,640 101,640 2,940,082 2,940,0822014 0.04 1.54 2,386 2,154,497 1,019,890 348,366 46,839 550,185 189,216 104,350 104,350 2,050,146 2,050,1462015 0.04 1.58 2,434 2,217,787 1,055,892 355,334 53,865 561,188 191,507 107,061 107,061 2,110,726 2,110,7262016 0.04 1.62 2,531 2,334,286 1,117,638 369,547 61,945 583,636 201,519 109,771 109,771 2,224,515 2,224,5152017 0.04 1.66 2,632 2,430,456 1,159,941 384,329 71,237 606,981 207,968 112,482 112,482 2,317,975 2,317,9752018 0.04 1.70 2,738 2,524,698 1,203,845 399,702 81,923 631,260 207,968 115,192 115,192 2,409,506 2,409,5062019 0.04 1.74 2,875 2,640,755 1,249,410 419,687 94,211 662,824 214,623 117,902 117,902 2,522,853 2,522,8532020 0.04 1.78 3,018 2,763,170 1,296,700 440,672 108,343 695,965 221,491 120,613 120,613 2,642,557 2,642,5572021 0.04 1.82 3,169 2,939,460 1,392,819 462,705 124,594 730,763 228,579 123,323 123,323 2,816,137 2,816,1372022 0.04 1.86 3,359 3,093,342 1,449,089 490,468 143,283 774,609 235,893 126,034 126,034 2,967,308 2,967,3082023 0.04 1.90 3,595 3,342,064 1,580,215 524,800 164,775 828,831 243,442 128,744 128,744 3,213,320 3,213,3202024 0.04 1.94 3,846 3,622,361 1,733,251 561,536 189,492 886,850 251,232 131,454 131,454 3,490,906 3,490,9062025 0.04 1.98 4,115 3,752,172 1,733,251 600,844 217,916 948,929 251,232 134,165 134,165 3,618,007 3,618,0072026 0.04 2.02 4,403 3,893,343 1,733,251 642,903 250,603 1,015,354 251,232 136,875 136,875 3,756,468 3,756,4682027 0.04 2.06 4,712 4,047,011 1,733,251 687,906 288,193 1,086,429 251,232 139,586 139,586 3,907,426 3,907,4262028 0.04 2.10 5,042 4,214,444 1,733,251 736,060 331,422 1,162,479 251,232 142,296 142,296 4,072,148 4,072,1482029 0.04 2.14 5,394 4,397,055 1,733,251 787,584 381,136 1,243,852 251,232 145,006 145,006 4,252,049 4,252,0492030 0.04 2.18 4,154 3,987,472 1,946,028 606,459 217,916 957,797 259,271 147,717 147,717 3,839,755 3,839,755

BENEFITS



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DCF and financial ratios for quantified benefits forecast, project component 2 – CLUJ COUNTY

QUANTIFIABLE BENEFITS

DISCOUNTED BENEFITS @ 5.0%INVESTMENTS

NET "ECF"YEAR

2006 0 0 5,858,378 -5,858,3782007 0 0 5,858,378 -5,858,3782008 1,150,958 994,241 5,858,378 -4,864,1372009 2,689,193 2,212,405 0 2,212,4052010 3,036,507 2,379,183 0 2,379,1832011 3,186,232 2,377,615 0 2,377,6152012 3,229,662 2,295,261 0 2,295,2612013 2,940,082 1,989,963 0 1,989,9632014 2,050,146 1,321,543 0 1,321,5432015 2,110,726 1,295,803 0 1,295,8032016 2,224,515 1,300,628 0 1,300,6282017 2,317,975 1,290,735 0 1,290,7352018 2,409,506 1,277,812 0 1,277,8122019 2,522,853 1,274,212 0 1,274,2122020 2,642,557 1,271,115 0 1,271,1152021 2,816,137 1,290,105 0 1,290,1052022 2,967,308 1,294,627 0 1,294,6272023 3,213,320 1,401,961 0 1,401,9612024 3,490,906 1,523,071 0 1,523,0712025 3,618,007 1,578,524 0 1,578,5242026 3,756,468 1,638,934 0 1,638,9342027 3,907,426 1,704,797 0 1,704,7972028 4,072,148 1,776,665 0 1,776,6652029 4,252,049 1,855,155 0 1,855,1552030 3,839,755 1,675,272 0 1,675,272

ENPV PROJECT 6,290,114ERR 14.1%EB/C 3.50

PROJECT COMPONENT IIECONOMIC COSTS AND BENEFITS

-8

-6

-4

-2

0

2

4

6

8

2006

Mill

ions

Benefits Costs Net economic costs & benefits



Economic Ratios Calculations

The calculation of internal rate of return and cost-benefits ratio are presented in table 6.4 above.

The quantification of the project benefits reveals a ENPV for the project of EUR 6,29 million over 20 years. The economic IRR is over 14.1% , and the economic benefit / cost ratio is 3,5, all of which indicate a high profitability of the project for the economic development of the project area.

It should be noted that the most enduring benefit, i.e. the economic benefit with the longest lasting significant effect is the benefits deriving from the farmers’ access to markets – the impact of which increases over 20 years from cca. 400.000 to 2 million EURO per year. The benefits relating to the bypass road aspect of the project are significant as well, but their highest value lies before the completion of the freeway and of the beltway system around the city of Cluj-Napoca. The mainstay benefits of component 2 come from local economic development effects, in terms of agricultural development and from the development of local tourism.

Sensitivity analysis

The main benefit of the project is the economic development resulting from the farmers’ access to markets on the project road, which amounts to over 1/2 of the project’s quantifiable benefits. A reduction of those benefits due to declining / aging rural population, increased availability of jobs in the city, preponderance of eco-tourism over agriculture in the development of the area etc, would have a significant impact over the project ratios; It should be also noted that the last two alternative scenarios mentioned would also not be possible without the project. Nonetheless, a 30% reduction in this benefit would result in (under a “pessimistic” or “worse case” scenario) would result in the following ratios:


ERR 12.3%

E B/C 2.74

Converseley, assuming that the project road will lead to increased agricultural activity and transfer to markets to the effect of 30% over the forecast (the “optimistic” or “best case” scenario) would result in the following ratios:


ERR 15.7%

E B/C 3.81

More importantly, from a non-quantitative perspective (because putting a value on human life is by definition arbitrary and perhaps a bit insensitive), the social benefit of eliminating a large part of the accidents with fatalities from DN 1 along the Feleac section by the creation of the project road loop is highly significant.

For the purposes of the sensitivity analysis of Project Component 2, the model presented in tables 6.3 and 6.4 (as point estimates) has been employed in performing a Monte Carlo simulation, with input parameters derived from the traffic studies described herein and from the three economic scenarios shown in section 3.3.3. method. The simulation was run for 10.000 iterations, with the following results:



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Probability Distribution for ENPV, project component 2

The ENPV is not only quite high (6,21 million as a point estimate / mean), WITH A HIGH OF 9,13 AND A LOW OF 3,45. This reflects the high economic benefits the component will present for the project area.

Probability Distribution for ERR, project component 2

The same stable results / low variance are to be seen in the statistical distribution of EIRR, shown above, whereby the expected value is 14,1%, with the upper and lower limits being 12,3 and 15,7 respectively.



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Risk Identification Project Concept Risk

The overall level of risk of a road construction project, using traditional technology and conducted in a relatively stable macroeconomic environment, is considered to be reasonably low. The areas of concept design that could have involved some technical risk – relatively high gradients on some road sections in Cluj County – have been eliminated.

The terrain layout and geology do not, under present circumstances, warrant introduction of catastrophic insurance costs in the project budget.

Construction Risk

Traditionally most risk classes associated with such projects relate to cost overruns due to the contractors falling, for a variety of reasons, behind schedule.

Such risks are easily mitigated by contracting out the work under a under fixed-price, fixed-time turnkey contract, secured by warranties and backed by performance bonds.

Two types of warranties should be taken into account,

MATERIALS AND WORKMANSHIP WARRANTIES, whereby the contractor is responsible for correcting defects in work elements within contractor’s control (materials and workmanship), during the warranty period.

PERFORMANCE WARRANTIES , whereby the contractor assumes full responsibility for pavement performance during the warranty period. In effect, the contractor guarantees that the pavement will perform at a desired quality level. Under a performance warranty the contractor assumes responsibility for some or all design decisions, e.g., design/build projects.

Financial Risk

The primary risk associated with both project components would be a high opportunity cost, namely the chance that the same amounts of money could be spent on other things that would have a higher socioeconomic impact in the targeted communities. This risk is mitigated by very good economic cost-benefits, IRR and NPV ratios, and also by the fact that both project components are solidly grounded in local economic development strategies for the target communities.

Another financial risk is

Organizational Risk Possible organizational risks include lack of coordination between the project partners to ensure sustainability of the projects, authority overlap with local / central government agencies, the elimination or substantial modification in the future of the structure of the local public authorities, etc.



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The current organizational arrangements are set up to mitigate the former. Insofar as the latter, structural reform of the LPA’s will preserve the project PIU. Legal Risk

The project PIU will conduct a due diligence assessment as to the possibility of the relevant legal risks and allocating such risks to other parties as far as possible (eg. to the builder under the construction contract).

The PIU will also monitor any changes in the risk assessment throughout the project.

QA analysis Quality indicators Quantity indicators Definition of Services

The primary services provided by project component 1 are: “improved access to the NW industrial area, especially for the workforce living in central and southern residential areas”; for the first project component, and “access to the Cluj-Napoca - Apahida Marketing Center” for rural residents living in the area S-E of Cluj Napoca for the second component.

It is however difficult to present the outcome of the project as a distinct “service” to be provided separately. Moreover, although the project does address specific constituencies, or market segments, such as the labor force commuting from their places of residence to work in the industrial area NW and local business traffic at Oradea and the villagers who need easy access to the marketing center and local business traffic at Apahida near Cluj-Napoca, the outcome of the project does in fact benefit any number of constituencies (through light and heavy traffic, other commuters, etc.).

From an economic standpoint, the project provides services, or benefits, to two main constituencies:

Services Provided Directly to Users

The most immediately observable service provided by the project is the overall transportation system efficiency improvement at both locations, a user benefit. The rehabilitated and modernized access road in Oreadea will improve traffic flow, especially at peak hours, allowing commuters to reach their workplaces at the industrial area on time, improving local business traffic and eliminating hundreds of thousands of Euro (per year) worth of unnecessary expenses due to slow and halting traffic at idle speed, traffic jams, etc.

The modernized and new sections of the road in Cluj county will allow cca. 4 thousand small agricultural producers to bring their produce to market without having to take wide detours, saving time, fuel, and enticing more producers to bring their wares to the same destination.

Both measures will lead to increases in business productivity (and output) facilitated by transportation improvements, as well as improvements in other environmental and quality of life factors which may affect business growth, property values and the economic well-being of both communities.



Page 91 of 97

“Services”, i.e. Benefits, Provided to the Taxpayers

The three main “services” provided by the project to the taxpayers will be:

Economic development fostered by the two measures will lead to an expansion of the tax base resulting from:

o job growth (as local quota of personal income taxes) o increased property values (and corresponding increases in local property taxes)

• Spending effect of the increase in local disposable income resulting from savings in fuel consumption and time.

• Reduction in the road repair bill resulting from the project, provided that the project road is maintained as per recommended schedule.

The modest benefits in terms of travel time and operating cost reflect the usage levels of the road. For cars, the value of time savings is somewhat smaller due to the offsetting costs of fuel consumption at higher speeds. However, for trucks there are additional cost savings due to the reduction in stops

Key Competitive Assets

With the completion of the two project components, many of the valuable business and cultural resources of the Oradea and Cluj-Napoca peri-urban communities will become more accessible to the trans-European traffic flow currently entering Romania at Bors, and subsequently on the new Oradea-Brasov freeway, as well as other parts of the two counties and the rest of the country. The reduction in travel time for both cars and trucks traveling on the project road at Oradea and on the rebuilt county road in Cluj County will result in both communities being more attractive places to do business. Coupled with the completion of the new freeway, there will be increased opportunities for business attraction and expansion in both areas. Some of the area’s key assets which will enhance this growth include:

• Available Skilled Workforce – A reduction in the manufacturing sector over the past 14 years has resulted in a loss of employment opportunities for local workers with advanced skills.

• Easy Access to Markets/Customers/Suppliers. In the case of Oradea, businesses can reach out to over 60% of the EU in one day’s truck drive from the North-West Oradea industrial parks. This is especially important for “just-in-time” industries such as auto and truck parts manufacturers and distribution centers. In the case of Cluj County, the new road will permit not only the farmers’ access to city markets, but also the inflow of tourists into these picturesque, pristine areas of Cluj County.

• In the case of Cluj County, better access for the local population to education, social and medical facilities in the city of Cluj Napoca.

Project funding

Local contribution

In terms of exploring co-financing options, the consultant had prepared investment budgets for two varioants of the project: with and without extending the bridge over the river Cris. In the first version, seen in table 6.4 below, the total value of the project is cca. EUR 18,2 million, 6,7 of which represent the value of Component 1 in Oradea and 12,9 million represents the value of Component 2 in Cluj County.



Page 92 of 97

Financing plan

own budget other total LCComponent 1 Oradea * 2,300,000 766,666 3,066,666 4,976,679 4,976,679 8,043,345 695,549 8,738,894Component 2 Cluj ** 2,700,000 900,000 3,600,000 3,868,323 11,604,969 15,473,291 19,073,291 1,451,048 20,524,339

Total 5,000,000 1,666,666 6,666,666 8,845,002 11,604,969 20,449,970 27,116,636 2,146,597 29,263,233FinancingComponent 1 OradeaComponent 2 Cluj

(€ 492,225)(€ 1,530,406)

Loan @ 6,5%, 20 Years, 3 years grace period, yearly payment =Loan @ 6,5%, 20 Years, 3 years grace period, yearly payment =

Value of the investment Total eligible

Non Eligible includind

V.A.T.Total

budgetTotal Grant

Eligible Local contribution

PHARE NATIONAL

For the entire project, the beneficiaries will receive EUR 6,25 million in grants, EUR 5 million from the EU via the Phare SEC program and EUR 1,25 million from the Government of Romania. A total of either EUR 14,1 or 14,2 million in non-eligible costs will be contributed directly by the two beneficiaries, and a total amount of either EUR 11,9 or 13,2 million in co-financing by the beneficiaries will be contributed in the form loans, to be repaid over 15 years with 3 years grace period.

Sustainability of the PHARE Project The Municipality of Oradea

Legal Responsibilities & Jurisdiction

The Local Council is the local public administration body established at the city level in order to provide administration and municipal services to the community.

The City Council operates under the authority of the local public administration law - number 15 of 23 April 2001. According to this and related statutes, the main responsibilities of the City Council are:

Approves to studies, forecasts and programs for socio-economic development and for urban development planning;

Administers the public and private domain of the town or commune; makes all the decisions regarding the local utilities authority; draws measures needed for the construction, maintenance and modernization of the roads,

bridges as well as the whole infrastructure belonging to the communication routes of local interest;

approves the technical-economic documentations for investment works of local interest and ensures the proper conditions for their development;

establishes measures for environment protection.

Organizational Structure

The organizational structure of the two (2) Municipalities is represented in the charts in Annex 1.

According to the Romanian law, the local council has the legislative power and the mayor has the executive power. The number of members of the local council for towns with population between 50.001 and 100.000 inhabitants is twenty-one (21).

There are no major differences between City of Oradea and Cluj County Council in the setup of their local public administrations.

Both are organized in three (3) main departments:

Economic



Page 93 of 97

Technical Local public administration.

The departments have the same attributions and responsibilities for both municipalities. The number of people employed in the local council of City of Oradea is 104 and for Cluj County Council are 103.

The mayor is elected through direct public vote, whereas the vice-mayors are elected by the local council. Council members are elected indirectly, based on nominal lists proposed by the political parties.

One minor difference in the organization of the two administrations is the fact that City of Oradea has two (2) vice-mayors who coordinate the activities of the technical and the local administration departments; the economic department is subordinated directly to the mayor. In Cluj County Council, all three departments – technical, public administration and economic - are coordinated by the single vice-mayor. The Local Council of City of Oradea has nine (9) management positions and Cluj County Council has eleven (11).

Financial Situation

A summary breakdown of the financial situation of the Municipality of Oradea is presented on the following page.

With a borrowing power well in excess of EUR 1 million in yearly re-payments, the City of Oradea can cover the cost of the loan for Porject component 1 under almost any conceivable economic scenario.



SUMMARY P&L, DEBT OUTSTANDING AND LEGALLY ALLOWED BORROWING LIMIT, MUNICIPALITY OF ORADEAEUR 000

REVENUES in thuosands EUR 2,001 2,002 2,003 2,004 2,005 2,006 2,007 2,008 2,009LOCALLY GENERATED REVENUESLocal Taxes, households 3,268 4,138 3,257 3,402 3,711 3,897 4,092 4,297 4,512Local taxes, corporate 5,551 5,294 4,352 5,006 4,439 4,661 4,484 5,139 5,396Other locally generated revenues 2,599 2,800 4,269 4,321 5,063 5,364 5,993 5,861 6,154Income from sales of municipality property 223 686 2,813 3,750 2,682 1,994 876 920 925City quota of personal income taxes 8,341 7,335 7,532 7,381 9,783 10,158 10,349 11,653 12,216Cash Reserves 290 0 399 0

TOTAL LOCALLY GENERATED REVENUES 20,273 20,253 22,621 23,860 25,678 26,074 25,794 27,870 29,203TRANSFERS FROM THE STATE BUDGETQuota of value added tax (VAT) 10,076 11,039 17,148 20,483 11,108 11,664 12,247 12,859 13,502Quota of personal income taxes for ballancing the b 16 1,222 2,087 1,629 274 315 362 452 474(District) heating subsidies 1,772 3,575 0 8,700 9,134 9,591 10,071 10,574Other subsidies from the state budget 4,595 3,526 806 48

TOTAL TRANSFERS FROM THE STATE BUDGET 16,459 19,362 20,041 22,160 20,082 21,113 22,200 23,382 24,550DONATIONS AND SPONSORSHIPSLoans

TOTAL REVENUES 36,732 39,615 42,662 46,020 45,760 47,187 47,994 51,252 53,753EXPENDITURES in thousands EURPersonnel expenses 11,364 12,359 12,121 13,319 14,554 15,282 16,046 16,848 17,690Purchases of goods and services 9,101 8,944 9,276 9,745 11,367 12,408 13,029 11,066 11,619

Subventions (from the municipality and transferred from the state budget to the population) 6,848 8,622 8,985 10,402 14,657 14,509 15,023 16,723 17,559Capital expenditures 9,315 9,549 10,282 9,585 3,078 3,232 3,394 3,564 3,742Loan repayments (principal, interest & feeds) 104 141 1,998 2,969 1,804 1,472 213 2,747 2,823Guarantee fund 300.0 284.0 289.0 304 320Loans extended

TOTAL EXPENDITURES 36,732 39,615 42,662 46,020 45,760 47,187 47,994 51,252 53,753

CUMMULATED VALUE OF YEARLY PAYMENTS (PRINCIPAL, INTEREST & FEES ON LOAN INSTALLMENTS)CREDITOR - Project 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016ING - Beltway Phase I 1261 0 0 0 0 0 0 0 0 0 0 0 0Municipal bonds, first issue 469 1497 1282 0 0 0 0 0 0 0 0 0 0Raiffeisen Bank - Beltway Phase I 226 189 161 71 0 0 0 0 0 0 0 0 0Volksbank - Equipment for "Drumuri Orasenesti" 250 198 174 150 66 0 0 0 0 0 0 0 0Municipal bonds, second issue 493 447 447 447 1504 1269 1180 0 0 0 0 0 0BERD loan guarantee, MUDP II 96 847 830 812 795 778 760 743 363 0 0 0 0BERD ISPA loan 0 81 179 566 878 846 814 781 883 981 931 883 422AutoRom - Leasing city buses 140 71 71 71 71 71 71 0 0 0 0 0 0Raiffeisen - Rehabilitation tram lines 522 758 778 732 687 641 595 142 0 0 0 0 0API Loan 18 323 391 368 0 0 0 0 0 0 0 0 0TOTAL 3,475 4,410 4,314 3,217 4,000 3,604 3,419 1,666 1,246 981 931 883 422

Oradea Local Council 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016LOCALLY GENERATED REVENUE 23,860 25,678 26,074 25,794 27,870 29,203 31,247 33,278 35,441 37,745 40,123 42,651 45,295Borrowing Limit* (20% of locally raised revenue) 4,772 5,136 5,215 5,159 5,574 5,841 6,249 6,656 7,088 7,549 8,025 8,530 9,059Obligations Already assumed 3,475 4,410 4,314 3,217 4,000 3,604 3,419 1,666 1,246 981 931 883 422Borrowing Power, in terms of yearly payment** 1,297 726 901 1,942 1,574 2,236 2,830 4,990 5,842 6,568 7,094 7,648 8,637



The Cluj County Council Legal Responsibilities & Jurisdiction

The County Council is the local public administration body established at the county level in order to coordinate and support the activities of local councils of smaller administrative units (towns and communes) in the provision of public services.

The County Council operates under the authority of the local public administration law - number 15 of 23 April 2001. According to this and related statutes, the main responsibilities of the County Council are:

Adopts strategies and programmes for economic and social development of the County (includes financial responsibilities)

Administers the public and private domain of the County Determines and approves the urban development plan of the County Initiates, decides, secures financing, and approves the construction, maintenance and

modernization of county infrastructure, namely roads, bridges etc. classified as “county-level infrastructure” (“drum Uri jadeite”).

Allocates funds to local councils throughout the county, for the support of local public administrations, public and social services, etc.

Administers a budget consisting primarily of three main sources:

o Locally generated revenues, consisting of various direct local taxes, revenue from stat-owned enterprises, etc.

o Two % quotas of (national-level) income taxes collected from the county. Of the personal income taxes paid by both the employees and the employers throughout the county to the national government, two quotas are transferred back to the County Council: a 10% quota attributed directly to the County Council, and a 15% quota given to the County Council for redistribution to smaller towns and villages countywide.

o a % quota of the VAT generated within the county.

Financial Situation

A summary breakdown of the financial situation of the Cluj County Council is presented on the following page.

With a borrowing power between EUR 1.1 and EUR 6 million in yearly re-payments, the Cluj County Council can also cover the cost of the loan for Porject component 2 under almost any conceivable economic scenario.



SUMMARY P&L, DEBT OUTSTANDING AND LEGALLY ALLOWED BORROWING LIMIT, CLUJ COUNTY COUNCILEUR 000

REVENUES in thuosands EUR 2001 2002 2003 2004 2005 2006 2007 2008 2009LOCALLY GENERATED REVENUESLocal Taxes, households 0 0 0 0 - - - - Local taxes, corporate 3,050 1,890 386 482 441 475 506 553 603Other locally generated revenues 261 118 142 178 107 114 119 126 134Income from sales of county property 2,155 784 1,059 1,324 2,145 1,000 1,052 1,105 1,160City quota of personal income taxes 5,210 4,665 5,032 7,290 7,314 6,620 8,048 7,334 7,430Cash Reserves 0 0 0 0 - - - - 0

TOTAL LOCALLY GENERATED REVENUES 10,676 7,457 6,619 9,274 10,007 8,209 9,725 9,118 9,327TRANSFERS FROM THE STATE BUDGETQuota of value added tax (VAT) 2,160 4,355 3,484 4,354 8,209 6,648 4,957 5,596 6,267Quota of personal income taxes for ballancing the b 4,964 4,468 6,934 7,667 1,964 2,084 2,083 2,083 2,083(District) heating subsidies 702 978 1,220 1,525Other subsidies from the state budget 3,135 402 4,413 5,516 20,646 20,099 17,459 16,332 16,250

TOTAL TRANSFERS FROM THE STATE BUDGET 10,961 10,203 16,051 19,062 30,819 28,831 24,499 24,011 24,600DONATIONS AND SPONSORSHIPS 2 6 8 10 17 22 24 24 24Loans

TOTAL REVENUES 21,639 17,666 22,678 28,346 40,843 37,062 34,248 33,153 33,951EXPENDITURES in thousands EUR

Personnel expenses 2,554 3,168 4,057 5,005 5,877 5,877 5,877 5,876 5,876Purchases of goods and services 4,555 4,063 4,135 5,056 5,254 5,314 5,349 5,488 5,652

Subventions (from the municipality and transferred from the state budget to the population) 1,167 1,973 2,039 1,664 1,795 2,146 2,094 1,957 1,981Capital expenditures 10,426 5,335 5,637 6,800 6,430 5,185 6,183 3,423 3,381Loan repayments (principal, interest & feeds) 2,810 2,948 6,641 9,655 21,248 18,540 17,745 16,408 17,059Guarantee fund 127.0 179.0 169.0 166.0 167 Loans extended 72

TOTAL EXPENDITURES 21,639 17,666 22,678 28,346 40,843 37,062 37,248 33,152 33,949

LOANS ASSUMED (foreign & domestic)

SOURCE CURRENCY -moneda 2,000 2,001 2,002 2,003 2,004

Equipment "Recycler with tar foam" Euro 303 302 131Equipment " Power Pack" Euro 217 1801 1829TOTAL 0 303 519 1933 1829

CUMMULATED VALUE OF YEARLY PAYMENTS (PRINCIPAL, INTEREST & FEES ON LOAN INSTALLMENTS)CREDITOR CURRENCY 2,004 2,005 2,006 2,007 2,008 2,009 Total

Equipment " Power Pack" Euro 1,829 1,543 3,372TOTAL 1,829 1,543 3,372

Cluj County Council EUR 000 2004 2005 2006 2007 2008 2009 2010 2011 2012LOCALLY GENERATED REVENUE 9,274 10,007 8,209 9,725 9,118 9,327 9,980 10,629 11,319Borrowing Limit* (20% of locally raised revenue) 1,855 2,001 1,642 1,945 1,824 1,865 1,996 2,126 2,264Obligations Already assumed 1,829 1,543 0 0 0 0 0 0 0Borrowing Power, in terms of yearly payment** 26 458 1,642 1,945 1,824 1,865 1,996 2,126 2,264

GRACE PERIOD (months)

LOAN DURATION (years)



Estimate on people employed as a consequence of project implementation Number of jobs during execution: 225 Number of jobs during operation: 4 Approvals and agreements Approvals and agreements issued by the dully authorised bodies, in accordance with the law in force: - top manager approval as regards project need and opportunity; - urban planning certificate, including location in the urban plan, authorised and approved in accordance with the law; - approvals for utilities (thermal and electric supply, pitch gas, water, sewerage, telecommunications etc.); - agreements and approvals for environmental and water protection; - other specialist approvals, in accordance with the law. Drawings - Location plan (1:25.000-1:5.000) - General layout (1:5.000-1:500)"

S.C. QUANTUM LEAP S.A.

GENERAL BILL OF QUANTITIES

"Access Ways for Development in the Two Main Economic Centers of the North - West Region Cluj Napoca and Oradea "

in RON/ EURO at exchange rate as of 12 Iuly 2005EURO = 3.5735

No. Name of expenses chapters and subchaptersAmount (VAT not included) of which ar propous

Total public achievementRON EURO RON EURO

1 2 3 4 5 6PART I

CHAPTER 1Land procurement and arrangement expenses

1.1 Land procurement - - - - 1.2 Land arrangement 1,376,544 385,209 1,376,544 385,209 1.3 Environmental protection arrangements 778,540 217,865 778,540 217,865

CHAPTER 2Utilities supply expenses2.1 Utilities supply expenses - - - -

CHAPTER 3Design and technical assistance expenses3.1 Ground surveys 414,630 116,029 414,630 116,029 3.2 Obtaining permits, authorizations 879,091 246,003 879,091 246,003 3.3 Design and engineering 2,182,026 171,235 2,182,026 171,235 3.4 Public achievment 3,800 532 3,800 532 3.5 Consulting contracted by the beneficiary 879,266 246,052 879,266 246,052 3.6 Tehnical assistance 1,004,876 281,202 1,004,876 281,202

CAPITOLUL 4Basic investment expenses4.1 Construction works and installations 87,281,030 24,424,522 87,281,030 24,424,522 4.2 Machinery and Equipment setup - - - - 4.3 Machinery, technological and functional equipments incl. set - - - - 4.4 Machinery not including setup and transport equipments - - - - 4.5 Facilities - - - -

CHAPTER 5Other expenses5.1 Construction site preparation - - - -

5.1.1. Construction works 1,570,119 439,378 1,570,119 439,378,480 5.1.2. Expenses related to construction site preparation 307,202 85,967 307,202 85,967

5.2 Comissions, fees, legal quotas, financing costs - - - - 5.2.1. Comissions, fees and legal quotas 1,082,412 302,900 1,082,412 302,900 5.2.2. Credit cost - - - 1,960,000

5.3 Miscellaneous and contingent expenses 5,587,866 1,563,695 5,587,866 1,563,695 CHAPTER 6

Comissioning expenses6.1 Training for the operational personnel - - - - 6.2 Technological tests - - - -

TOTAL 103,347,402 28,920,499 103,021,538 28,829,310 of which Construction Works & Setup 91,006,233 25,466,974 91,006,233 25,466,974

PART IIResidual value of fixed assets - - included in the investment objective - -

PART IIIWorking capital necessary for the first production cycle - -

GRAND TOTAL 102,905,869 28,796,941 of which Construction Works & Setup 91,006,233 25,466,974

VAT (19%) 19,552,115 5,471,419 TOTAL BILL OF QUANTITIES (including VAT) 122,457,984 34,268,360

Page 1


EURO = 3.5735

RON EURO RON EURO1 2 3 4 5 6

1.1 Land procurement - - - 01.2 Land arrangement 733,233 205,186 733,233 205,186 1.3 Environmental protection arrangements 778,540 217,865 778,540 217,865

2.1 Utilities supply expenses -

3.1 Ground surveys 22,100 6,184 22,100 6,184 3.2 Obtaining permits, authorizations 244,763 68,494 244,763 68,494 3.3 Design and engineering 611,907 171,235 611,907 171,235 3.4 Public achievment 1,900 532 1,900 532 3.5 Consulting contracted by the beneficiary 439,633 123,026 439,633 123,026 3.6 Tehnical assistance 502,438 140,601 502,438 140,601

4.1 Construction works and installations 24,476,287 6,849,388 24,476,287 6,849,388 4.2 Machinery and Equipment setup - 04.3 Machinery, technological and functional equipments incl. setup - 04.4 Machinery not including setup and transport equipments - 04.5 Facilities - 0

5.1 Construction site preparation5.1.1. Construction works - 05.1.2. Expenses related to construction site preparation 307,202 85,967 307,202 85,967

5.2 Comissions, fees, legal quotas, financing costs5.2.1. Comissions, fees and legal quotas 265,950 74,423 265,950 74,423 5.2.2. Credit cost - 1960000

5.3 Miscellaneous and contingent expenses 2,447,629 684,939 2,447,629 684,939

6.1 Training for the operational personnel - 6.2 Technological tests - -


Residual value of fixed assets - included in the investment objective -

Working capital necessary for the first production cycle - 0GRAND TOTAL 30,390,049 8,504,281 37,394,109 10,464,281

of which Construction Works & Setup 25,988,060 7,272,439 25,988,060 7,272,439 VAT (19%) 5,774,109 1,615,813 4,937,731 1,381,763

TOTAL BILL OF QUANTITIES (including VAT) 36,164,158 10,120,095 30,925,791 8,654,202

GENERAL BILL OF QUANTITIESincluding the expenses necessary for the Objective:

"Main Accessway to the Industrial Area North - West Oradea - Bors"

PART II

PART III

CAPITOLUL 4Basic investment expenses

CHAPTER 6Comissioning expenses

CHAPTER 5Other expenses

of which ar propous public achievement

PART ICHAPTER 1

Total

Land procurement and arrangement expenses

CHAPTER 3Design and technical assistance expenses

CHAPTER 2Utilities supply expenses

in RON/ EURO at exchange rate as of 12 Iuly 2005

No. Name of expenses chapters and subchaptersAmount (VAT not included)

Page 1


EURO = 3.5735

RON EURO1 2 3 4

1 Networks deviations 733,233 205,186 2 Plantations, green spaces 343,520 96,130 3 Road works 10,886,627 3,046,489 4 Arrangement of traffic junction interchange on Dacia Bvd. 759,001 212,397 5 Parking lots - - 6 Sidewalks 174,218 48,753 7 Consolidations of overpass on Dacia Bvd. 1,203,446 336,770 8 Bridges over Peta creek 139,841 39,133 9 Culverts 155,000 43,375

10 Rehabilitation of the bridge 1,084,155 303,387 11 Traffic lights at crossroads 280,145 78,395 12 Traffic markings, signalling and orientation signs 70,835 19,822 13 Arrangement of railway overpass 252,000 70,519 14 Sewerage works 2,721,328 761,530 15 Electric networks 2,123,044 594,108 16 Relocation of district heating pipelines Iosia 720,000 201,483 17 Water supply 2,829,894 791,911

TOTAL I (VAT not included) 24,476,287 6,849,388 VAT (19%) 4,650,495 1,301,384

TOTAL I (including VAT) 29,126,782 8,150,771

1 Machinery and technological equipments setup - - TOTAL II (VAT not included) - -

VAT (19%) - - TOTAL II (including VAT) - -

1 Technological machinery and equipment - - 2 Transport machinery and equipment - - 3 Facilities - -

TOTAL III (VAT not included) - - T.V.A. (19%) - -

TOTAL III (including VAT) - - 24,476,287 6,849,388

4,650,495 1,301,384 29,126,782 8,150,771

SPECIFIC BILL OF QUANTITIES

I - CONSTRUCTION WORKS AND INSTALLATIONS


No.

TOTAL BILL OF QUANTITIES OF THE OBJECTIVE (inlcuding

III - PROCUREMENT

TOTAL (TOTAL I + TOTAL II + TOTAL III) (VAT not included)

VAT (19%)

II - EQUIPMENT SETUP

Name of expenses chapters and subchapters Amount per types of works

"Main Accessway to the Industrial Area North - West Oradea - Bors"

Page 1


EURO = 3.5735

RON EURO RON EURO1 2 3 4 5 6

1.1 Land procurement - - - 01.2 Land arrangement 643,311 180,023 643,311 180,023 1.3 Environmental protection arrangements - - - -

2.1 Utilities supply expenses -

3.1 Ground surveys 392,530 109,845 392,530 109,845 3.2 Obtaining permits, authorizations 634,328 177,509 634,328 177,509 3.3 Design and engineering 1,570,119 1,570,119 3.4 Public achievment 1,900 1,900 3.5 Consulting contracted by the beneficiary 439,633 123,026 439,633 123,026 3.6 Tehnical assistance 502,438 140,601 502,438 140,601

4.1 Construction works and installations 62,804,743 17,575,134 62,804,743 17,575,134 4.2 Machinery and Equipment setup - 04.3 Machinery, technological and functional equipments incl. setup - 04.4 Machinery not including setup and transport equipments - 04.5 Facilities - 0

5.1 Construction site preparation5.1.1. Construction works 1,570,119 439,378 1,570,119 439,378,480 5.1.2. Expenses related to construction site preparation - -

5.2 Comissions, fees, legal quotas, financing costs5.2.1. Comissions, fees and legal quotas 816,462 228,477 816,462 228,477 5.2.2. Credit cost

5.3 Miscellaneous and contingent expenses 3,140,237 878,757 3,140,237 878,757

6.1 Training for the operational personnel - 6.2 Technological tests - -


Residual value of fixed assets - included in the investment objective -

Working capital necessary for the first production cycle - 0GRAND TOTAL 72,515,820 20,292,660 72,515,820 20,292,660

of which Construction Works & Setup 65,018,173 18,194,536 65,018,173 18,194,536 VAT (19%) 13,778,006 3,855,605 13,778,006 3,855,605

TOTAL BILL OF QUANTITIES (including VAT) 86,293,826 24,148,265 86,293,826 24,148,265

"County Road Linking Agricultural Areas in Cluj County to Marketing and Processing Centers in the city of Cluj-Napoca", Phase: Feasibility Study


No. Name of expenses chapters and subchaptersAmount (VAT not included) of which ar propous

public achievement

PART ICHAPTER 1

Total

CAPITOLUL 4

Land procurement and arrangement expenses

CHAPTER 3Design and technical assistance expenses

CHAPTER 2Utilities supply expenses

Basic investment expenses

CHAPTER 6Comissioning expenses

CHAPTER 5Other expenses

GENERAL BILL OF QUANTITIES

PART II

PART III

Page 1


EURO = 3.5735

RON EURO1 2 3 4

1 ROAD KM 0+000 - KM 23+196 50,856,884 14,231,673 2 CROSSROAD AND FIT OUT WITH TRAFFIC LIGHT AT RAILWA 2,236,657 625,901 3 RETAINING WALL (L=1500ML) 3,610,889 1,010,463 4 PARAPET FLEXIBLE (L=3225ML) 633,263 177,211 5 DRAINAGE (L=1200ML) 362,062 101,319 6 DITCHES PAVEMENTS (L=4600ML) 404,521 113,200 7 CARRIAGEWAY GUTTER (L=4665ML) 1,495,502 418,498 8 PRECAST CULVERT TYPE P2 - 24BUC 1,283,159 359,076 9 PPRECAST CULVERT TYPE C2 - 21BUC 1,476,507 413,182

10 PRECAST CULVERT TYPE D5 - 1BUC 342,475 95,837 11 REPAIR BRIDGE L=10M - 1 BUC+I189 102,824 28,774

TOTAL I (VAT not included) 62,804,743 17,575,134 VAT (19%) 11,932,901 3,339,276

TOTAL I (including VAT) 74,737,644 20,914,410

1 Machinery and technological equipments setup - - TOTAL II (VAT not included) - -

VAT (19%) - - TOTAL II (including VAT) - -

1 Technological machinery and equipment - - 2 Transport machinery and equipment - - 3 Facilities - -

TOTAL III (VAT not included) - - T.V.A. (19%) - -

TOTAL III (including VAT) - - 62,804,743 17,575,134 11,932,901 3,339,276 74,737,644 20,914,410

VAT (19%)

II - EQUIPMENT SETUP

Name of expenses chapters and subchapters Amount per types of works

"County Road Linking Agricultural Areas in Cluj County to Marketing and Processing Centers in the city of Cluj-Napoca", Phase: Feasibility Study

TOTAL BILL OF QUANTITIES OF THE OBJECTIVE (inlcuding

III - PROCUREMENT

TOTAL (TOTAL I + TOTAL II + TOTAL III) (VAT not included)

SPECIFIC BILL OF QUANTITIES

I - CONSTRUCTION WORKS AND INSTALLATIONS


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ACCESS WAYS FOR DEVELOPMENT IN THE TWO MAIN … · city of Cluj-Napoca to the marketing center and other processing facilities in the city, access which currently is unavailable for

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