BiH share in regional corridor leads nowhere fast

10/07/2012

The Suhodol-Tarcin section of the motorway is expected to be completed in 28 months.

By Anes Alic for Southeast European Times in Sarajevo -- 10/07/12

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Construction of this potentially key motorway in BiH is now years behind schedule. [Reuters]

The Federation entity of Bosnia and Herzegovina (FBIH) has signed a 115m-euro contract with the Turkish construction company Cengiz Insaat to build a new section of the planned north-south Corridor VC motorway.

The contract represents a small part of ongoing construction for BiH's share in the pan-European corridor linking Budapest in the north with Croatia's port of Ploce in the south.

The Suhodol-Tarcin section, about 40km south of Sarajevo, is expected to be completed in 28 months. The lengthy timeframe takes into account the construction of 3.5km of tunnels through the mountains and a key interchange. Funding has been secured through a loan from the European Bank for Reconstruction and Development.

Cengiz Insaat representatives said they are up to the task, noting that the company has contracted 6 billion euros in similar projects worldwide, including in Kosovo and Albania.

This is the first contract Cengiz Insaat has signed with BiH, after outbidding five other foreign companies.

Some Bosnians, however, remain sceptical and oppose contracting out to foreign companies.

In late May, representatives of about 60 Bosnian construction companies, subcontracted by a Slovenian company to work on a bypass motorway in Sarajevo, blocked the site, demanding two years in payment arrears.

The main contractor, Slovenia's SCT, recently filed for bankruptcy and its accounts have been frozen. The company owes local subcontractors more than 7m euros.

At the same time, the FBiH government is preparing to reverse an agreement with another Slovenian construction company, Primorje, which took over the contract with SCT. Primorje, too, has announced a bankruptcy filing. Primorje's original contract was to build the Vijenac tunnel, a 32m-euro contract.

Ismet Ahmethodzic, executive director of the Centrotrans Tranzit construction company, told SETimes that the local companies are only seeking payment for work already completed and are presently waiting for a court to unfreeze SCT's accounts, with an estimated 30m euros in them.

"The blockade was only a desperate measure. We are still working on the project because we can't afford to abort it. When the construction of the corridor was set, we even bought more machinery and employed more workers and are burdened with credits and payments," Ahmethodzic said.

The corridor project in BiH has proceeded at a very slow pace, with only 55km of the total 340km motorway built since the project began in 1998. In comparison, Croatia and Hungry are nearly completing their shares.

According to a 2006 government feasibility study, the BiH portion of the motorway should be completed in 2014. But experts now estimate it will take at least another decade.

Osman Lindov, professor of the Sarajevo Communications Faculty, told SETimes that the lack of transparency and clarity in strategy are problems. "The bureaucracy is the main cause of slow construction as the authorities failed to pass the law on motorway construction."

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According to Lindov, BiH's failure to regulate planning, project documentation and the expropriations process led to a situation in which private, individual property owners are blocking construction by seeking unrealistic compensation.

"On top of that, at least half a dozen dubious foreign companies entered the Bosnian market, while a similar number of legitimate companies who showed interest withdrew in the confusion, " he said.

"Instead of being a great business potential for Bosnian companies and a boost for the country's economy, so far the construction of the Corridor has led to more workers being laid off and more construction companies being shut down," Ahmethodzic said.

The longest stretch of this regional corridor traverses BiH and is widely touted as instrumental to the country's development as it would facilitate better connections with the EU and its markets. When construction is eventually completed, the corridor is expected to attract foreign investors and tourists.

This content was commissioned for SETimes.com.
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