Failed Highway Project in Poland
&
Croatia Bridge Construction
Hannah Langford, Kyu Kyung Lee, Shimon Rosenblum
Timeline
2009- China’s company COVEC won bid to
construct the A2 section (49km) of highway
in Poland
2010- Competing companies and local
workers refused to help COVEC source
materials and employees
2011- After Polish refusal to alter contract
COVEC was forced to stop work on the project
Timeline
2012- Covec returns to work in S.
Asia and Africa
2017- China company China Road
and Bridge Corporation won bid to
construct Pelješac bridge (2.4km)
connecting all of Croatia
2022- Expected bridge completion
Poland Breakdown
-Poland wanted to build an east-west
highway across the country before 2012
European championship
--COVEC had the lowest bid (about half of
government estimates)
-Other companies were angry at the low
price
-Poland believed Chinese government would
subsidise losses if necessary
Failure of Poland Highway Project
-COVEC not used to European standards
-Failed to provide financial records
-Surprised by environmental regulations
-Poorly organized leadership
-Underestimated costs of Polish wages and materials
-Polish subcontractors refused to work with them
Poland Opinions
-Southern Asia
-Africa
-Different standards
-Poland bid selection process
-Tension from competitors and Polish workers
-Unreasonable? difficulty in sourcing materials
Motives
Poland:
-Solely economic
-Threatened by China
China:
-mainly political
- future economic prospect
Croatia Breakdown
Pelješac Bridge Purpose :
-connect “Dubrovnik-Neretva” with main land
Croatia
-bypass Bosnia’s Neum (2.4 KM, 4-lane express way)
=Huge economic benefits concerning tourism and
trade
Croatia Breakdown
,
View from Croatia
-Bridge projects is very important for government
-Tourism
-Schengen area
-Long-time goal of government
-Controversy of giving contract to Chinese company
-Would rather have Croatian workers
Views from EU and China
European Union
-EU gets more inclusivity
- Bridge eliminates need to
interact with B&H
- Can stress pressure of nearby
non-EU countries
-Worried about adding
connections with China
China
-China gets into the EU construction
market, can prove themselves
-China has previous experience in area
-famil
iar with working in that region
Poland Highway and Croatian Bridge: Similarities
-Expanding influence to EU
-Infrastructure
-Politics
-Surprisingly low price
-Other companies unhappy
-EU unhappy deal is going to China
-High-risk projects
Comparing and Improving: 2009 -> 2017
Poland:
-Put in bid 50% lower than the
estimated worth of project
-Wanted to hire Polish
subcontractors
-COVEC previously worked in
South Asia and Africa
Croatia:
-Put in bid for 21% lower than
the competitors
-Use Chinese workers
-CRBC previously worked in
similar areas ( non - EU states)
-EU required more specific
information before project
started
Conclusion
“China has gotten smarter, avoiding the mistakes that they made the last
time, but they are still abiding to their own rules, which could be
controversial in the EU”
References
https://inavukic.com/2012/09/28/croatia-bridge-over-troubled-water/
http://www.jpolrisk.com/perspectives-for-development-of-china-eu-relations-i
n-the-infrastructure-investment-sector-a-case-study-of-covecs-investment-in-p
oland/
https://voxeurop.eu/en/content/article/716731-motorway-china-couldnt-build
https://www.nytimes.com/2018/10/11/world/europe/china-croatia-bridge-adri
atic-sea.html
https://www.silkroadbriefing.com/news/2018/05/10/chinese-contractors-winni
ng-bid-eu-funded-peljesac-bridge-croatia-raises-eyebrows/