Roads directorate files suit against Chinese highway contractor

Chinese worker at A2 construction site in June 2011. Photo: PAP/Grzegorz Michalowski

The Directorate (GDDKiA) is demanding a sum of 845 million zloty (200 million euro) from the Chinese firm, which had to resign from the construction of two key investments on the A2 motorway between Warsaw and the central city of Lodz after running into financial trouble in May.

Negotiations between the contractor and the Directorate fell through in June.

Deputy Infrastructure Minister in charge of roads, Radoslaw Stepien has said that the Directorate’s move is “tough”, adding, however, that he is surprised at the lack of financial compensation from COVEC thus far.

“A guarantee issued from one of China’s largest banks is an assurance which shows all investors its importance as to the [payment’s] realisation,” Stepien said.

Meanwhile, Sun Yuxi, China’s ambassador to Poland, has since mooted that “from the outset it was clear that COVEC could not build the motorway for the terms it offered,” adding that “the Polish side could have offered more help to the company, but it didn’t.”

Business as usual?

Yet problems with COVEC have not led to a stagnation in Polish-Chinese cooperation. Slawomir Nowak, a minister in the Presidential Chancellery told Polish Radio that President Komorowski’s visit to China in December will be geared towards mutual economic cooperation.

“Poland has a good offer for the Chinese and it has to be presented there,” Nowak announced.

Possibilities of deeper economic cooperation between Central European countries with China has also been on the agenda of the Economic Forum currently being held in Krynica, southern Poland. (jb)

Source: IAR/Bloomberg BusinessWeek Polska