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February 9, 2023

Bechtel contract, terminated

The government pays EUR 37.2 M damages and EUR 50 M debt. Damages to Bechtel will be paid from the budget, one segment may be tendered every year, PM Victor Ponta said.

The Minister Delegate for Infrastructure Projects, Dan Sova, said Wednesday night that the agreement with Bechtel for the construction of the Transylvania motorway had been terminated, the Romanian state owing the American contractor EUR 37.2 M damages and a debt of EUR 50 M, according to Mediafax. Upon the signing of the rescission papers, the worksite of the Transylvania motorway was taken over by the National Company for Roads and Motorways of Romania. The remaining segments will be awarded under concession agreements.
The Charge d’affairs of the US Embassy in Bucharest, Duane Butcher, yesterday visited Victoria Palace for a one hour discussion on the termination of the agreements with the American company Bechtel with Prime Minister Victor Ponta.
The premier said the money needed for paying the damages to Bechtel for terminating the agreement for the construction of the Transylvania motorway would be sources from the national budget. ‘Minister Sova informed, late last night, on the conclusion of negotiations and signing of the agreement, in fact the termination. It is neither one billion as a former minister was saying, nor 500 million as another ex-minister was suggesting – which only means we had rather weak ministers who didn’t know how to look through a contract – but 30 million plus VAT. In this way we can actually – and we have the entire path free from any obligation – think through the strategy for the development of the road infrastructure in the entire Transylvanian region. In fact, this year I hope we organise the tendering for the Sebes-Campia Turzii segment, practically link Cluj to the Arad –Sibiu motorway. Then, either with European money or in public-private partnership, we can continue with the old route to Suplacul-de-Barcau and down to Sighisoara’, Ponta said.
Sova said on Monday that the termination of the agreement with Bechtel was a question of days and that there were still a few details to agree on in the meantime.

Nastase: Transylvania motorway project, victim of political sabotage
Ex-PM Adrian Nastase said yesterday the project of Transylvania motorway the construction had been victim of sabotage, pointing out that, in 2005, Traian Basescu and the minister of transport at the time suspended the work for almost two years.

Asked if a different solution was possible for the agreement with Bechtel, other than the one where the Romanian state has to pay EUR 37 M damages, Nastase said: ‘Yes. In 2005. In 2005, if I may remind you, Traian Basescu wanted to check if Bechtel had paid any commissions to the my Cabinet and put the project on hold for almost two years – Minister Dobre (Gheorghe Dobre – a/n) at the time is responsible for this decision – the motorway works’.
Nastase said that, during the suspension of the works, the Bechtel contract tripled because of the fact that the equipment had already been brought into the country and the price of cement, concrete, iron and expropriation went up. ’These are the explanations. Why could Bechtel complete the motorway in Croatia up to Dubrovnik, or the one in Albania to Kosovo? We should ask ourselves these questions’, Nastase said.

Transport Ministry inherits EUR 680 M debt from Boagiu
Ex-Transport Minister Anca Boagiu left behind ‘a disastrous situation’, from contracts under execution posing major issues to debts of over EUR 680 M to various companies. The accusations were made by Minister Dan Sova during a Realitatea TV show. ‘I came to the coordination of the National Motorways Company immediately after Mrs. Boagiu and her court child, Nazare… I was the witness – and this is something I never said before but we still need to say this because, in Romanian politics, if you say what you found and what the situation is in your department you are wrong. I found EUR 680 M debt to companies left by Boagiu and Nazare, which have been paid up by the Government of Romania at the express request of PM Ponta who said: <Pay up arrears!> We have paid EUR 680 M inherited from Boagiu’, Sova said. In addition – the minister claims – he found a number of contracts under execution that raised some major difficulties. ‘I found 11 contracts in execution with various major issues – Orastie-Sibiu – agreement signed by Boagiu. On segments 3 and 4 I inherited from her a very serious design and engineering problem. Six km along segment 3 collapsed and 600 m on segment 4. We are now bargaining and disputing the situation with the construction company – Impregilo. Mrs. Boagiu signed that agreement’.
The minister also pointed out that, since 2005, all transport ministers who had CNADNR reporting to them had rolled over debts. The Ponta Government ‘was left to hold the sack after Boagiu and Nazare’ from January to May 2013. At the same time – Dan Sova stressed – since May 2012 until now, the Ponta Government has been unable to reclaim any sum spent on the construction of motorways and national roads. Asked why he had not disclosed the information so far, Sova said: ‘All this data takes a lot of processing effort and is also very difficult to collect.

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