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Last week, the formal and informal Romanian press filled us with “breaking news” about a huge infrastructure project: the Americans will build a railway and a road from the port of Constanța to Gdansk, respectively, which the Americans will connect the Sea. Black with the Baltic via the Constanța-Gdansk highway and railway.
The “influencers” also filled Romanian Facebook with maps like the one below, explaining how the Americans will build a road and railway between Gdansk and Constanța, through Ukraine and then through Moldova.
Before getting into the actual and official details of the news, I can’t help but wonder how you can imagine that NATO’s military strategy is to rely on the rapid movement of troops along the eastern flank through a non-EU country. NATO and ex -USSR like Ukraine?
Similarly, I can’t help but wonder how anyone can imagine that the US would build a new railroad in Europe, given that the US rail network complains about underfunding, underdevelopment, and 19th century technologies such as the rails stuck in nails on the main lines, with average traffic speeds similar to underdeveloped countries, while having a zero kilometers of fixed high-speed line? And no, Acela Express on the east coast and Brightline in Florida are not high-speed trains, as they run at top speeds below 200 km / h on conventional lines.
In fact, the United States is under great pressure from states to have the federal government finance the construction of high-speed lines, similar to the National Interstate and Defense Highways Act, which founded the federal highway system of the United States. United in 1956. There is even a legislative proposal for $ 240 billion in federal funding for high-speed rail. And that’s because the few current high-speed rail construction initiatives in the US are exclusively private, but for the most part progress is slow or no progress.
How would Americans in that context see the news that the United States does not build railroads in the United States, but in Europe?
I fully understand the need for pro-Westernism and pro-Americanism in a country like Romania, which was until recently in Russia’s sphere of influence and which is still haunted by the specter of the RCP. And the wish for someone to come and give us something. Just as I understand the electoral context and the fear of nationalist issues.
However, the heap of news about how “the Americans will build us” is probably one of the cruelest “tricks” I have seen in the Romanian press. Because, all the official details were available from the moment of the announcement. And the official communiqués tell a completely different story, which is very good news for Romania anyway.
- Cernavoda nuclear power plant
The agreement between Romania and the United States, signed last week, allows Romania to buy US nuclear technology. This and nothing else. Nuclear technology is obviously a strategic area for the United States, so American companies are prohibited from free trade in these technologies without the consent of the Federal Government.
The official statement on the US Department of Energy website is very clear in this regard:
“Once formally executed, this landmark agreement will lay the groundwork for Romania to use US expertise and technology with a multinational equipment construction reactor, Units 3 and 4 of the Cernavoda Nuclear Power Plant and refurbishment of Unit 1 of the reactor.“
No money so far. The US ambassador’s speech did not even say that the project would be fully funded by the United States. All that Adrian Zuckermann said is that this is a project worth a total of $ 8 billion. And that does not mean at all that “the Americans give us 8 billion to build the reactors.”
I also go back to financing.
From this point I return to our Romanian court, with two questions. Nuclear Eléctrica and implicitly the Romanian Government estimate, according to a 2012 study, that, for the completion of reactors 3 and 4 of Cernavoda, 6.500 million euros are needed. I mean, “surprise!”, Exactly the value of the $ 8 billion project that Adrian Zuckermann was talking about.
However, not only that this value has already been questioned by previous Chinese partners, who since 2016 estimated a value of 7.2 billion euros. But, a common rule of thumb is that a nuclear reactor has a construction cost of around 6-8,000 EUR for every kW installed. That is, taking into account that reactors 3 and 4 will each have 720 MW, it means that the two reactors will cost at least 2 x 720 x 1000 x 6000 = 8,640 million euros. so At least 8 billion euros, not dollars!
Of course, this is an approximation and a detailed study can tell otherwise. But it is highly unlikely, given that the global industry says otherwise. Rather, realistically speaking, the project will cost us at least 10 billion euros, because it involves public contracts in Romania and because so far no one has managed to build a nuclear power plant within the initially estimated budget.
So let’s not forget that this money will come from interest-bearing financing. With the exception of EU grants, the money is loaned to earn interest. Which means that we are easily adding another 2 billion to the construction costs of reactors 3 and 4.
And so we reached 12,000 million euros, almost double the official estimate.
So the first question would be: – How realistic is the Romanian authorities’ estimate of only 6.5 billion euros for the construction costs of reactors 3 and 4 at Cernavoda?
The second question: – Why does Romania continue to build nuclear fission reactors, given that, in the civilized world, there is already a tendency to abandon them?
Nuclear fission reactors, that is, those that obtain energy from the radioactive decay of heavy uranium atoms, are in fact atomic bombs with controlled explosion, so that the “explosion” occurs in 2-3 decades instead of a few seconds. Their problem is that as soon as the safety and control mechanisms fail, as happened in Chernobyl and Fukushima, those reactors become what they were from the beginning: atomic bombs.
Furthermore, nuclear fission plants produce radioactive waste that remains dangerous for decades and must be stored under special conditions during this period.
These are the reasons why Germany is in the process of shutting down and dismantling all nuclear reactors by the end of 2022.
So why does Romania still want to invest more than 10 billion euros in 2020 in something dangerous for people and toxic for the environment, when it already has many alternative ecological solutions?
two. Gdansk – Constanța highway and railway
All the United States did in the past week was to become a supporter, for strategic NATO reasons, of the relevant Three Seas Initiative projects. This initiative brings together 12 EU countries from Central and Eastern Europe and aims to accelerate the development of infrastructure, including transport, between the Baltic Sea, the Black Sea and the Adriatic Sea.
The United States has decided to include projects on the list of strategic military projects Via Carpathia Y Rail2Sea of the Three Seas Initiative. The routes of the two projects, which have now become strategic, were reconfirmed, among others, at the Summit of the Three Seas in Bucharest in 2018 (!!).
Via Carpathia is a highway project designed to connect the Lithuanian port of Klaipeda with Thessaloniki in Greece, Constanta in Romania and Svilengrad in Bulgaria (the border with Turkey). The connecting branch to Gdansk is not included in Via CarpathiaBut this does not refer to Romania, but to the similar agreement between the United States and Poland.
In the Romanian territory, Via Carpatia has the route Oradea – Arad – Sibiu – Bucharest – Constanța. For this route to be completely in the profile of the road, they are missing for the moment Oradea – Arad road, Tunnels on the A1 Lugoj – Deva lot 3, A1 Sibiu – Pitești and optional A0 North or A0 South, that is to say, one of the two sectors of the Bucharest ring road between Bolintin and Pasărea.
Even so, nothing else is included in the Romanian territory in the “road that the Americans take”!
So we are talking about an almost total overlap with the TEN-T corridor formed by A1 and A2 (Curtici – Arad – Sibiu – Bucharest – Constanța) already financed with loans and non-reimbursable funds from the EU, with Romania’s only benefit being the declaration of the Oradea motorway as a priority. – Arad.
Rail2Sea In fact, it is a railway interconnection project of the ports of Gdansk and Constanța, a project under the auspices of which the two ports, together with PKP Cargo and CFR Marfă, have signed a memorandum of understanding since July 21, 2017.
The route in the Romanian territory is on existing railways (!!), not new (!!), which are or will be modernized.
Specifically, as of 2019, it is the Curtici – Arad – Timișoara section, followed by the 900 highway (Timișoara – Drobeta Turnu-Severin – Craiova – Bucharest), the Bucharest railway belt and then the 800 Bucharest – Constanța highway.
The line is also part of the TEN-T core network of the European Union and, since the Curtici – Arad sections, respectively Bucharest – Constanța are already modernized, the inclusion in the strategic partnership with the USA practically provides Romania with a double financing, EU and US, for the 900 Timisoara – Bucharest highway. Which is not bad at all.
3. Financing of the strategic alliance
Things are even clearer when it comes to financing. Again, directly from the source, that is, from the website of EXIM, the import and export bank of the United States of America:
“Under the MOU, EXIM and Romania agree to explore and identify options to potentially use EXIM funding in an aggregate total amount of up to $ 7 billion, and identify areas to work together to promote business development opportunities, particularly in the energy and infrastructure industries. “
Nothing clearer here: the United States is willing to finance Romania – that is, lend it, with interest, not give it – up to $ 7 billion, if and only if Romania buys US products and services, with priority in the field of energy (for example, the Cernavoda power station) and infrastructure (for example, Via Carpatia and Rail2Sea). $ 7 billion for all projects, not each one. Namely, among other things, the amount doesn’t even cover the total super optimistic cost of just $ 8 billion for reactors 3 and 4 at Cernavoda.
The money was not and will not be awarded to Romania!
They are available to EXIM Bank in the US and if Romania decides to build, for example, the Oradea – Arad highway with an American builder, then the money for its construction can be borrowed from EXIM Bank.
However, no details were released. most likely, no dollar of this funding will pass through Romania. Instead, invoice settlements will take place in the US, directly between EXIM Bank and the US companies that will build or provide technology in Romania. Of course, later a good part of the money would still reach Romania through salaries and the payment of local subcontractors by American companies. Which is more than good news, because it means jobs and injection of funds in Romania.
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