First phase of NetCity to be completed by March

7 Dec 2011

The first phase of Bucharest’s controversial ‘NetCity’ fibre-optic project is expected to be completed by March 2012, according to the project’s technical director Adrian Mihai. Speaking to business daily Ziarul Financiar (ZF), Mihai commented: ‘Currently, the first stage of development is 65% complete. Initially, the first phase was due to be completed by December 2010, but the financial crisis turned everything upside down’. According to Mihai, approximately 10,000 buildings have been connected to the network to date, with over 3,000km of cables installed – rising to 10,000km by end-2012. Mihai added that UTI Systems, which won the tender for the project back in June 2008, has now taken on a new strategic partner, Israeli firm Elbit. UTI has a 49-year concession for the project, and will pay a 12% annual fee out of the project’s revenues.

According to TeleGeography’s GlobalComms Database, in recent years NetCity has drawn heavy criticism from Romania’s Cable Communications Association (ACC), as well as leading operators such as UPC and Romania Cable Systems (RCS&RDS). Although all parties were broadly supportive of the project, they were critical of the city authorities for having already started construction without all of the necessary technical and economic preparations having been made. Moreover, they said, NetCity would create a monopoly, with cable operators having to rent both the ducts and network. The cost of NetCity, which the ACC does not believe to be financially viable, was originally estimated at EUR202 million (USD62.2 million) for a total length of 1,427km, although the price subsequently crept up to EUR300 million. Although the work rate has subsequently improved, by mid-2011 just 88km of NetCity was functional, with the ACC’s legal manoeuvres blamed for the delay. The slow progress prompted the local press to suggest that if work carried on at the current rate it would take over 30 years to implement the full project.

Romania, NetCity (Romania)