A string of legal and political battles look likely in the aftermath of a broken highway contract in Poland. A Chinese led consortium headed by China Overseas Engineering Group (2487 COVEC) had been working on a contract for a 50km section of the A2 highway between Lodz and capital Warsaw. The initial award of the contract to COVEC was highly controversial with accusations from other firms tendering for the work that they were unable to compete with the extremely low bid offered by the consortium.
However, COVEC has now broken the original contract agreed with the Polish General Directorate for National Roads and Motorways (1361 GDDKiA). COVEC said it pulled out of the project due to a dispute with GDDKiA over payment deadlines and the unexpected increase in costs for materials.
An official response from GDDKiA has yet to be received. Disputes concerning payments to subcontractors by COVEC are also in hand. It is thought that GDDKiA has been carrying out talks with COVEC over possibly resuming the construction work but under different terms than before, with changes to allow for factors such as the increase in materials prices. It remains to be seen whether GDDKiA will award contracts for portions of the project to firms that submitted tenders in the initial bidding round, which would also allow construction work to recommence. The road does have to be complete for the Euro 2012 football event and GDDKiA is working within a tight schedule to ensure that the section of the A2 between Lodz and Warsaw will be open to traffic in time.
However, COVEC has now broken the original contract agreed with the Polish General Directorate for National Roads and Motorways (
An official response from GDDKiA has yet to be received. Disputes concerning payments to subcontractors by COVEC are also in hand. It is thought that GDDKiA has been carrying out talks with COVEC over possibly resuming the construction work but under different terms than before, with changes to allow for factors such as the increase in materials prices. It remains to be seen whether GDDKiA will award contracts for portions of the project to firms that submitted tenders in the initial bidding round, which would also allow construction work to recommence. The road does have to be complete for the Euro 2012 football event and GDDKiA is working within a tight schedule to ensure that the section of the A2 between Lodz and Warsaw will be open to traffic in time.
