The government received a bill of 115 million euros for the construction of the first phase of the Smokovac interchange, the electricity and water supply network for the highway, which the team of the former Minister of Transport Ivan Brajović "forgot" to include in the contract for the construction of the priority section of the highway Podgorica - Mateševo.
The "News" source from the Ministry of Transport and the project team confirmed that the main contractor, the Chinese company CRBC, sent a bid for these "additional" works, but states that the government team's estimate is that these works cannot cost more than 60 to 70 million euros, because which will be negotiated in order to arrive at a realistic price.
As a result, the construction of this section of the highway will cost the state coffers and the citizens several tens of millions more, because the agreement on the construction of the highway between the Government and the Chinese does not stipulate the obligation to supply the highway and the facilities along it with electricity and water, as well as the construction of the first phase of the Smokovac loop, i.e. the connecting road to the highway from the direction of Podgorica.
"It is true that the final electricity supply, water supply to the highway and village facilities, and the connection road to Smokovac were not agreed in the contract. We have to move on, we can't shoot someone for it. In the contract, there is an item of 10 percent of costs for unforeseen and subsequent works, and we will certainly not exceed that percentage. There is a certain calculation by the Chinese, but in the Ministry of Transport there is a team of engineers and an international engineer who will determine the real prices. There is a market, there are domestic subcontractors, other foreign contractors, although again it is most likely that we will reach a realistic price with the Chinese", said the interlocutor of "Vijesti" from the Government.
"Vijesti" announced in September of last year that CRBC refused to build the connection to the highway - the first phase of the Smokovac loop because it was not provided for in the contract signed by Brajović, and that it could cost the state 30 million euros in addition. Expropriation has not yet been completed for the interchange, so its construction and the completion of other "unforeseen" works will delay the opening of the highway, which was scheduled for May next year, to the end of 2019.
The connection to the highway from the direction of Podgorica, the first phase of the Smokovac loop, envisages a four-lane road that continues to the boulevard on Zlatica, rises ten meters from the ground and turns left above the former FK Kom stadium. The road then crosses the railway as an overpass and turns right towards Morača, where a large plateau with toll ramps will be built, and then a large bridge over Morača. This section is only about one and a half kilometers long, but almost all of it consists of overpasses and bridges, which makes it very expensive. The second phase of the Smokovac interchange envisages two connections for the continuation of the highway that will go around Podgorica, as well as the possible connection of the Adriatic-Ionian road, but this will probably be done in the second and third phases.
The contract "forgot" that the entire 42-kilometer section, as well as the buildings on it, must have electricity and water supply. It will also be an obligation to partially change the transmission lines for supplying electricity to villages near the highway. The source of "Vijesti" from the team that is now monitoring the construction of the highway, said that many of these works could have been cheaper for the state if they were part of the basic contract and were planned then, because now it will be necessary to partially modify the existing facilities and return to what has already been completed.
Thus, what should have been the basic works on the section of the highway, such as the connection to it and the electrical and water supply network, will now be agreed by the contract annex as "unforeseen and subsequent works".
The bid for the construction of the highway was officially submitted to CRBC in February 2013, but it was amended by annexes twice. The construction contract was signed by Brajović in February 2014, and the works officially started only in May 2015. The start of the main works was delayed almost a year because the Chinese side received incomplete data for the design of the project.
This section, according to the contract, costs 809 million euros for 41 kilometers, and 85 percent is paid from a loan from the Chinese Exim Bank of 944 million dollars.
At the time, it was also a mistake to contract the amount of the loan in dollars without credit risk insurance. At the time of taking the loan in October 2014, it was worth 743 million euros, and now it is 806 million euros. Fidelity Consulting's analysis shows that in 10 years, according to rough estimates, Montenegro could pay 153 million euros just for hedging costs based on the loan for the Bar - Boljare highway. At the end of 2014, when the loan was contracted, the cost of hedging could be six times lower than today.
The new government and the minister did not know what was "forgotten"
When the construction contract was signed five years ago, the Ministry of Transport published an information sheet about the project, and the Smokovac interchange was listed among the facilities that will be built within this priority phase. In the Government until September of last year, the new minister and prime minister considered that it was CRBC's obligation to design and build the first phase of the Smokovac interchange. This is what they announced in the first statements after the Chinese partner refused to build it.
"It is indisputable that the construction of the loop project was contracted, but there are different interpretations as to whether the Chinese company CRBC's obligation to construct the loop results from the contract. CRBC does not agree with us here, they think it is not foreseen, we think it is", said Marković.
Marković emphasized that if the CRBC insists that it is not their obligation, there is an international commission that will deal with it. If even that does not provide a solution, as pointed out by Marković, it will go to arbitration. However, the Prime Minister is convinced that an agreement will be reached, because the assumptions are already being made that with the completion of the first priority section, work will continue on the next section Mateševo - Andrijevica and Andrijevica - Boljari.
Transport Minister Osman Nurković then said that "the dilemma is whether the interchange is a contractual obligation or not".
"The committee I formed is working on that issue and we will soon sit down with the contractor. If we do not agree, arbitration is possible," said Nurković.
He stated that the problem arose due to the undefined nature of the contract, but that he believed in the agreement.
"The disputed part extends the contracted section by one and a half kilometers, so with the loop it will be 42,5 kilometers," said Nurković.
He stated that this problem will not be a stumbling block.
"If it is determined that this is not the investor's obligation, we will find money from the budget and pay. We will not allow it to slow down the overall dynamics and the opening of the highway," said Nurković.
It will increase public debt by 1,5 to 2,6 percent of GDP
The new problem for the government is how to find additional money in the coming days to pay for these "unforeseen and subsequent works". There is no money in the budget, so the only thing that remains is to provide money through new debt so that the highway will be in operation at the end of the year.
If the final price is within the current estimate of the Montenegrin side of 60 to 70 million euros, these "follow-up" works will increase the national debt by 1,5 percent of this year's GDP estimate, and if the CRBC price remains at 115 million, it will require 2,6 .XNUMX percent of GDP.
The national debt is now three billion euros or 70 percent of GDP. In the public debt management strategy, from the beginning of this year, it is predicted that the national debt will amount to 2,96 billion euros at the end of this year (67,5 percent of GDP), as well as that due to the measures of the rehabilitation plan next year, it will fall to 2,87, 62,8 billion (XNUMX percent of GDP).
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