Can you please introduce us to Habau’s current capabilities in Romania and your involvement in high profile projects in the oil & gas segment, such as BRUA?

Certainly. Although our headquarters are in Austria, we have subsidiaries all over Europe, and we opened our office in Romania 12 years ago, initially focusing on industrial parks. Working with Petrom, one of Romania’s largest oil companies, since 2008 was a natural decision given our history and relationship with OMV in Austria. We currently have 300 employees in the country and achieved over 35 million Euro turnover in 2018, in contrast to our humble beginnings with only 15 employees. BRUA was a game-changer last year and gave us a chance to grow exponentially. Overall, we have built a specific niche constructing pipelines and affiliated solutions for the oil & gas sector, serving clients such as OMV, Romgaz, Transgaz, or Conpet.

Romania covers 479 km out of BRUA’s regional infrastructure, starting in Podisor, a village close to Bucharest, and up to Recas, next to Timisoara. Habau partnered with INSPET to build one of the three compressor stations for BRUA, needed to compensate for the weaker pressure in Romania, namely the one close to Recas. BRUA was also divided into three lots, 180 km from Podisor, 140 km from Craiova, and the last 160 km from Vulcan up to Recas. Habau has been the leading pipe constructor for lots two and three, starting from September 2018. We now have 72 km built in Lot 3, for which we are pressure testing as the final step, and the rest of the work towards Bucharest is underway. We are well positioned for the April 2020 deadline.

Are there any other projects currently in the tendering phase, and do you have your sights set on any particular ones?

We are keen to take on additional projects, but the reality is that we did not bid on some of the recent tenders due to a rather serious problem we are facing regarding human resources. We are in a position where we need to import human resources from countries such as Ukraine, Macedonia, Montenegro, or Vietnam to do the necessary fieldwork. Our resources have been directed at key projects surrounding lots two and three for BRUA, where we are, in fact, bidding and hoping to be selected.

There are three major projects at the moment, BRUA, another development in the Northern side of Romania, as well as a Black Sea Pipeline in the bidding phase. Transgaz also has a number of smaller projects underway, with thousands of kilometers scheduled within the next decade.

Human resources have been identified as a significant pain point in the industry. Apart from importing talent from other countries, how is Habau PPS tackling this challenge?

At Habau PPS, we believe that it is not enough to solely rely on importing talent. We are taking a multi-faceted approach to address this challenge. For instance, we have partnered with the Austrian Embassy to establish training centers that aim to educate young people in Romania. Our first class is set to commence in September this year. Additionally, we are actively reaching out to Romanians working abroad through fairs and other means to create awareness about the changing work climate in Romania. We want to highlight the abundant opportunities available for great work with favorable conditions and competitive remuneration. The construction industry alone has a significant shortage of hundreds of thousands of employees, and relying solely on non-EU countries for talent is not a sustainable solution in the long run.

After spending over a decade in Romania’s business ecosystem, what is your assessment of the ease of doing business, and what are some of the challenges you have encountered?

Overall, we have observed positive developments in Romania’s business environment. However, the political stability factor remains a key consideration for investors. The past few years have witnessed numerous changes, and legislative transformations can occur abruptly, posing challenges, especially in the offshore sector. Nevertheless, there has been progress worth noting. Unlike a decade ago when changes in political parties resulted in the turnover of management in key administrative state institutions, nowadays, there is more continuity in management functions. We believe that this continuity is crucial in ensuring stability and long-term vision for these important state institutions, independent of politics. From a macro perspective, our experience in Romania has been mostly positive, and we believe there is room for further investments.

What are the priorities of Habau PPS in the coming years?

Our priorities at Habau PPS include consolidating our capabilities for the projects we are already involved in and strengthening our position for new projects that are up for tender. We are also open to inorganic growth through the acquisition of local companies when the timing is right, to ensure strategic expansion. However, the biggest challenge we face is human resources, and we are addressing this through an open recruitment campaign, which includes offering employees the flexibility to work across multiple locations for knowledge transfer and enhanced flexibility. We also anticipate new projects in the region, such as Moldova, but we consider Romania as the hub for Central and Eastern Europe.