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November 24, 2022

Romania’s partnership with Bechtel ends

The cost of the Transilvania motorway drops by 50 pc, as the American company will receive no compensation for the modification of the contract.

The US company Bechtel will leave the construction site of the Transilvania motorway in 2013 and will continue to work only on the Campia Turzii-Gilau and Suplacu de Barcau-Bors segments, which cumulate 118 of the 415 km of the motorway, thus allowing the state to put on auction the remaining six segments, Mediafax reports.

“Fortunately, Bechtel eventually understood that Romania is a European country where one cannot do as one pleases and, if it does not get things normal by complying with existing cost standards, the chances to work in Romania are minimal,” Transport Minister Anca Boagiu said Wednesday. The official did not provide a deadline for the completion of the whole Transilvania motorway and only said that the US Embassy in Bucharest and President Basescu had an important role in negotiations.

In a press release, the American company mentions that, under the agreement, Bechtel will build 60 more km of motorway by the end of 2013. The Transport Ministry will secure the financing for the construction until 2013. The Romanian National Company of Motorways and National Roads (CNADNR) will issue in due time the construction licenses needed for this operation. “The agreement includes the completion of another section of the Transilvania motorway, while observing the budget priorities of the Government,” said Walker Kimball, Infrastructure Manager with Bechtel.

On the other hand, the construction cost of the Transilvania motorway will be lowered by 50 pc to EUR 6.9 M/km, while on the other sections the estimated cost – which depends on the particularities of the terrain – will be EUR 7.2 M/km. The final price will however result from the auctions in which the construction contracts will be awarded to contractors, the Transport minister explained.

“So far, out of a total EUR 2.2 bln initially provided for the construction of the 413 km of motorway, we have spent EUR 1.25 bln on 54 km. If we went on with Bechtel under the current contract, we would have completed the motorway at a final cost of EUR 9.9 bln; now, the end price we will have to pay following this negotiation for the completion of works will amount to EUR 3.8 bln,” Boagiu explained. Without elaborating, the minister added that Romanian authorities also negotiated other clauses of the contract that refer to penalties, deadlines and payment of overdue sums.

In his turn, Premier Emil Boc said that Bechtel will not be compensated for the modification of contract. “They will carry on with the construction of the Suplacu de Barcau-Bors segment and, in the ruling coalition, we made the political decision to immediately put the Gilau-Mihaiesti segment on auction, because the design is complete,” Boc explained.

Speaking on the public radio channel ‘Romania Actualitati,” the premier yesterday criticised the Nastase government for allowing huge construction prices. “The Transilvania motorway will further be financed with money from the state budget, but only at a correct price. The Transilvania motorway remains a political goal and a project of the Government of Romania,” Boc added. According to the PM, more than EUR 6 bln have been saved to the state budget. Two motorway sections (Gilau-Mihaiesti and Targu Mures-Campia Turzii) will be immediately put to auction, while the others (Brasov-Tragu Mures) will be built on private-public partnerships, Boc concluded.

According to Minister Boagiu, the overdue payments to Bechtel amount to EUR 90 M, which the Government will disburse in two installments: the first right now, and the second at the end of this year.

Gitenstein: the solution is a success for all parties

The US Ambassador to Romania, Mark Gitenstein believes that the solution negotiated by the Ministry of Transport and Bechtel is a success for all parties, and especially for the people of Romania.

The US diplomat praised the Government’s decision to enforce a new payment method for the Transilvania motorway, as part of the package of proposals accepted by Bechtel, reads a press release issued by the US Embassy. “I strongly encourage the Government of Romania to embrace this agreement and to insure its smooth implementation in the same spirit of partnership and pragmatism that produced this deal.  Our goal now should be to complete these sections of the Transylvania Motorway with no further delays,” Gitenstein stated in the press release.

Minister Boagiu omits to mention the EUR 6 M/km already spent for the Bechtel segments of the motorway

PSD Senator Sorin Bota yesterday said that, by renegotiating the contract with Bechtel for the motorway segments to be built by the Americans, the price actually increased to EUR 12-13 M/km. The price of EUR 7 M announced by Transport Minister Anca Boagiu per kilometer of motorway should be added to the money already spent so far. The PSD senator accused Boagiu of “omitting to mention” the EUR 6M/km already spent by the American company on the motorway site so far. By renegotiating the contract, the Romanian state will pay an additional EUR 1 M/km compared to the price negotiated by the Nastase government with Bechtel, Bota explained. An analysis made by PSD shows that none of the recently concluded contracts for sections of the 4th Corridor complies with the cost standards set by the Transport Ministry.

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