Controversial highway plans

9th April 2010

© Acubens, www.wikipedia.pl New highway plans have caused controversy Share:

New figures show that spending on highway construction was 20 percent lower than planned last year due to budget pressures. This year, the government is adopting a controversial strategy to continue keeping these costs down - hiring a Chinese contractor.

The original 2009 budget for building highways and express roads of PLN 32 bln was cut back twice, dropping to PLN 22.7 bln. By year’s end, however, only 80 percent of that, or PLN 18.4 bln, had been spent. These spending statistics were released on Thursday by the parliamentary infrastructure committee in its report on the progress of road building ahead of the Euro 2012 football championships.

The report showed that it will be hard to finish many of these infrastructure projects before thousands of fans arrive in Poland two years from now. Deputy Minister for Infrastructure Radoslaw Stepien placed the blame for the delays on his predecessors from the Law and Justice Coalition, which ruled until November 2008.

In one of its efforts to cut the costs of building new roads, the government awarded the contract for building a section of the A2 highway to the Chinese Covec consortium. This has drawn protests from the European Construction Industry Federation, according to the Germany daily Frankfurter Allgemeine Zeitung.

The federation argues that Covec represents unfair competition for European companies because it is a sister company of the China Railway Group, which is a state-owned company subsidized by the Chinese government.

The German daily notes that the Chinese company will have 40 percent lower costs than similar European firms, not only due to its lower labour costs, but also because it can get capital from its government, which is illegal for countries in the EU.

“No company in the private sector can compete with the Chinese People’s Republic,” FAZ journalist Ulrich Paetzold said.