Century-old Siemens is looking forward to new business opportunities in Romania as Corina Mica talks with general manager Adrian Baicusi about the ups and downs of this country’s energy system
The buzzword these days in every aspect of Romania’s life, from social to political or business, is also putting a mark on the operations of German giant Siemens, which has taken on a course of strong local expansion for a number of years.
The century-old company plays on five different fields in Romania - transport, automation and control, IT & C, power and medical - with general manager Adrian Baicusi enjoying every moment of it.
“We promote the local sales and marketing organisation with a regionalisation concept,” he tells The Diplomat. “We have already opened locations in Timisoara and Cluj-Napoca, and five additional offices will soon follow in other parts of the country.”
“Romania has progressed a great deal in the administrative steps that it has taken,” says Baicusi. “There are new institutions in place, the power market operator Opcom is functional. All in all, the institutions are prepared to tackle the EU market. However, there are difficulties when discussing the efficiency of the system and its costs.”
The general manager says the most significant progress over the years has been from power grid company Transelectrica, which launched a consistent programme focused on rehabilitating power lines and substations.
“We were thus able to join the Union for the Coordination of Transmission of Electricity (UCTE) and the Romanian grid is now fully synchronised with that of Europe.”
Apart from that, how would one describe the trends locally? Baicusi believes the Government is looking more closely at satisfying energy costs for the financially disadvantaged people of Romania, and if this market does not develop with enough speed, the Government needs to become more involved.
“Compared to other sectors in the Romanian economy, energy has had very good strategies, but the amounts of money needed were too large,” he says. “It is important for the EU accession that the entire system gets mobilised, as there are many projects worth a total of billions of Euro. And if they are not feasible or profitable from the outset, the state can give financial guarantees.”
ROMANIA: COMPETITIVE ENOUGH?
“Regarding the efficiency of the system, we are not competitive at all,” says Baicusi. “In the thermal power field, plants are old, with a big consumption, a high degree of pollution, with very high costs and large personnel. In the hydro sector, there are very many basins that are clogged, not cleaned, and there is a matter to be solved between Hidroelectrica, the hydro power company and Apele Romane, the state company that owns all waters in Romania. Maintenance is costly in this respect.”
Market analysts think Romania will become to a large extent self-sufficient in energy once the second reactor (Unit II) of the country’s nuclear power plant at Cernavoda goes into operation next year.
But Baicusi sees things differently.
“I don’t think we can become fully independent energy-wise, because Romania is developing up to 35 per cent nuclear power, and if that happens you need to have a capacity reserve - be that hydro or thermal power… Having four nuclear reactors plus the hydro power as a back-up would be good, but what if it does not rain? Coal will remain important given all of the above. Biomass could become the alternative, but infrastructure is needed to develop that. Biofuels are more feasible.”
This country is in the middle of two important transport corridors for both gas and oil, which put it at the forefront of development of two important pipelines aimed at supplying much-needed fuel to Europe: Nabucco in gas and the Pan European Oil Pipeline (PEOP) in oil.
“Nabucco has all the chances to go through, because the dispute at the beginning of the year between Russia and the Ukraine has laid the ground for the process to speed up,” says Baicusi. “There will be 4.5 billion Euro available, and the feasibility study is very feasible – it can be done.”
PEOP was very often dubbed as the ‘dream pipeline’, as it is meant to transport oil from Constanta to the Italian port of Trieste. But Baicusi says this is closer to a ‘dream’ than reality.
“The project of carrying oil from a port on the Black Sea though this oil pipeline to Trieste would need to be pushed by a large supplier, the likes of Enel. It is more of a regional project, much more so than Nabucco, and the truth is that the Balkan countries have almost always fought between themselves on different issues. It would be more feasible if there were oil reserves in the Black Sea, but the situation of available resources does not compare to the Caspian Sea.”
SIEMENS IN ROMANIA
• Present in Romania since 1905
WHO IS ADRIAN BAICUSI?
The 41-year-old manager joined Siemens straight from OMV, where he was financial director.
“I started work at OMV from scratch in Romania and left when the retail network had 54 gas stations,” he says.
Before OMV, his work experience included two jobs at the same time, one at the Academy of Economic Studies, Bucharest, where he used to teach financial analysis, and a second as financial director with media giant Media Pro.
After having graduating from Harvard, he took on the position of director with Romania’s Agency for Reorganisation in the Ministry of Reforms, lead by Mircea Cosea.
“I have then been involved in proposed restructuring of large local companies, the likes of national airline Tarom,” he says. “I was an expert in central administration and restructuring of the economy in the private sector.”
A short episode in the show-biz sector meant work with the most important film distributors, and bringing in movies for the public. “I did that for Media Pro for two years, but I changed field of activity because I was attracted by new things and new people,” he says.
His biggest professional achievement?
“I am proud to be the head of Siemens in Romania,” he says without even blinking. “If at OMV I was in League B, now I definitely am in League A, and the progress is obvious.”