Romania Cancels Highway Contract With Bechtel

from BalkanInsight.com..

May 30, 2013

By Marian Chiriac/Bucharest

After ten years of irregular work and with only 52 km of road built out of a projected 415, the centre-left government on Wednesday halted all further co-operation with US company Bechtel.

Romania spent around 1.42 billion euro on construction so far, and still has to pay the company 37.2 million euro, which represents the amount due for the work that Bechtel has already done.

“We have finalized negotiations with Bechtel to cancel the contract. The next step is to give the highway project under concession, and then actually build it,” Dan Sova, the minister delegate for infrastructure projects, said.

Sova, a member of the ruling Social Democratic Party, put some of the blame on the previous centre-right government of Emil Boc for the failure of the contract with Bechtel.

“Bechtel and the Romanian National Roads Authority have jointly agreed on a settlement to end the contract for works on the Autostrada Transilvania. The agreed settlement amount of 37.2 million euro is compensation for damages incurred since the contract renegotiation in late 2011, after which works were unable to proceed as planned, leading to the eventual suspension of the works,” a Bechtel representative said in a statement to Balkan Insight.

Work on the Transylvanian Highway started in 2004 with a 2.2-billion-euro contract granted to Bechtel.

Construction halted in mid-2005, when a new government started looking into contracts concluded under the previous leftist administration.

As the costs of the highway had rocketed in the meantime, the government decided to renegotiate the contract and in the end to stop it.

With less than 500km of completed motorway, Romania lags behind the state-of-the-art road infrastructure common in many parts of Western Europe.

Years of neglect, bad management and lack of funding have deprived the country of the economic growth associated with faster and easier cross-country transit routes.

Link to the article: http://www.balkaninsight.com/en/article/romania-cancels-contract-with-bechtel

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