How much will the Morava Corridor actually cost?

The Morava road corridor from Pojate to Preljina will cost 745 million euro to make, plus 20% for “unforeseen costs”, which means it will cost a total of 900 million euro, or “only” 100 million more than previously announced, according to an analysis published by the Vreme weekly. 

The article’s author also wonders why now, when Serbia can take international loans under very favourable conditions, much more favourable than during the presidency of Boris Tadic, the Serbian government has not decided to finance the construction of this corridor in this way, but has opted for a financing arrangement concluded in a non-competitive procedure.

On 5 December, the Serbian government signed a contract with the Turkish-American consortium Bechtel-Enka stipulating the construction of the Morava Corridor.

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The exact final price of the deal has not been disclosed, Bechtel’s operations in the region have so far been always accompanied by subsequent price increases and public scandals, which were never prosecuted.

The article also recalls that, on the same day that the agreement with Bechtel-Enka was signed, President Vucic opened the construction site for the Ruma-Sabac-Loznica motorway segment. The Law on Public Procurement was disregarded too in this case, since the contract was concluded on the basis of the interstate agreement between Serbia and Azerbaijan. That section will be built by the Azeri company, Azvirt.

Azvirt became operational in Serbia during the reign of Boris Tadic, when the company was hired to build a 40 km stretch of the Ljig-Preljina motorway, for which Serbian government paid 320 million euro.

It is no big secret that the government overpaid at least 40 million euro for that segment. The then MP and now Serbian President, Aleksandar Vucic noted this information during a parliamentary debate when he attacked the opposition accusing them of being responsible for that scandal.

If we already know that Azvirt in Serbia, at least according to Vucic at the time when he was an MP, was involved in corrupt business, why did he then give the company another chance and what did they do to deserve it.

Citing a cost analysis related to the Ljig-Preljina segment, the article recalls that Azvirt was paid 8 million euro per kilometre for the mountainous section of this segment, which has many tunnels and slopes. The 110 km long Morava corridor, which is being built in a valley, could cost up to 900 million euro, or also 8 million euro per kilometre.

The two sections are incomparable as the Morava corridor does not pass over a hill or a river, so it is not necessary to build expensive infrastructure such as bridges and tunnels, unlike in the case of the difficult hilly terrain on the Ljig-Preljina road.

(Nova Ekonomija, 15.12.2019)

This post is also available in: Italiano

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