CCIR clarifications on the context of developing the new Romexpo and its importance
Publicat pe 10/03/2021
Bucharest, 10th of March 2021: To clarify once again the situation of the land pertaining to the Romexpo Exhibition Center, in the context of its legal status being regulated by transferring it into the ownership of the Chamber of Commerce and Industry of Romania (CCIR), please note the following:
We have taken note of the interests and actions of a particular business operator, which are geared toward hindering the investment endeavor proposed for revitalizing Romexpo. We believe that not only do their actions cause harm to image, but they also generate limitations on local and national development opportunities.
Firstly, there is no damage to the State to speak of. Romexpo S.A. can be deemed the damaged party, given that between 1990 and 1991 it was one of the few companies in Romania, if not the only one, faced with a refusal to being granted the ownership right to the land where it is located, unlike all other companies that had existed before 1990 and that acquired the ownership right to the assets, buildings and lands where they were running their business on a free of charge basis. In this context, the adoption of amendments to the law of chambers of commerce in Romania is, first and foremost, a historic acknowledgement and correction, respectively.
There are no restitution claims for the land area forming the actual scope of the transfer.
Regarding the compensation for damages the State would be bound to pay following this transfer, as has been erroneously communicated in the public domain, please note that pursuant to art. III paragraph (2) of the law adopted by the Parliament, in the case of lands that are subject to pending restitution claims, transferring the ownership right to CCIR on a free of charge basis shall only be made after clearing up their legal regime. In conclusion, for the land areas with a cleared up legal regime and which are not subject to restitution claims, the transfer of the ownership right to CCIR occurs after the law comes into effect, while for the land areas subject to restitution claims the same shall occur after the courts of law vested with settling these claims render a final ruling that clears up the legal regime of such land areas.
The State will collect 345 million Euro every year
The studies conducted by a prestigious financial analysis company show that 202 million Euro worth of taxes and fees will be paid to the State during the construction period, and during each year of operation the project is set to generate 345 million Euro exclusively for the State, including via the 30,000-plus jobs thus created.
Furthermore, please note that the land will not be used on a free of charge basis, as the developer will pay to CCIR, as provided by the law, a superficies tax that will be used for institutional consolidation and, implicitly, for supporting the business environment in Romania.
The land cannot be sold by the State
It is important to note that the land forming the scope of the transfer to CCIR, via the legislative amendments that were validated as constitutional by the Constitutional Court of Romania, has been under the management and use of CCIR since 1972 and that CCIR also has the right to use the land for another 32 years from now on.
Moreover, the buildings currently existing on said land are the property of Romexpo S.A., a company whose majority shareholder is CCIR. This means that the land is subject to the right of use until 2053, i.e. is not free of encumbrances, therefore it cannot be disposed of without just compensation to Romexpo and CCIR, and in this case the compensation incumbent on the State would add up to approximately 300 million Euro, an amount comparable to the alleged value of the land as circulated in the public domain.
“This is a straightforward matter: either we keep Romexpo as it currently is, or we invest in modernizing it and bringing it back to life via a 2.87 billion Euro investment alongside a Romanian partner, in which case we need ownership of the land. Considering the whole context, the right of use of CCIR and its ownership over the existing buildings, CCIR is the only institution the State can partner with to harness the potential of this land. We want Romexpo to be a landmark, as it used to be in its heyday, with a mixed-use hall, exhibition center, museums, and garden, and we believe this is also what the people of Romania want,” said Mihai Daraban, President of CCIR.