Government adopts contract proposal for second section of highway: Five-year construction deadline, two years to eliminate deficiencies

The Chinese consortium "PowerChina - Stecol - PCCD" will have five years to complete the main project and build the second section of the highway from Mateševo ​​to Andrijevica, while it will also be given two years to eliminate potential shortcomings in this work.

Any disputes between Monteput and the Chinese contractor will be resolved by a one-member commission, whose member, if there is no agreement between the two parties, will be appointed by the president of FIDIC (International Federation of Consulting Engineers) or a person appointed by him, while in the case of arbitration, the Arbitration Institution of the Swiss Chamber in Zurich will be competent.

This is stated, among other things, in the information about the conducted tender for the design and construction of the second section of the Bar - Boljare highway, with the Contract Proposal.

In mid-January, Monteput selected the Chinese consortium "PowerChina - Stecol - PCCD" as the contractor to carry out the main design and the second section of the Bar - Boljare highway from Mateševo ​​to Andrijevica. Their bid is worth 693.969.668 euros.

This route is about 23 kilometers long, and will be financed from the state treasury, through a 200 million euro loan from the European Bank for Reconstruction and Development (EBRD) and a 150 million euro European Union grant.

The contract is planned to be signed by the executive director of Monteput Milan Ljiljanić, representative of “Power Construction Corporation of China” Yang Bo, Jing Levei on behalf of “Stecol”, as well as Sun Qiliang ispred “PowerChina Chengdu”.

"The deadline for completion of the works is 60 months from the date of commencement of the works. The period of notification of deficiencies is two years. Single-member Dispute Resolution Commission: Appointment is made (if there is no agreement between the Parties) by the President of FIDIC or a person appointed by the President of FIDIC. Place of arbitration: Arbitration Institution of the Swiss Chamber in Zurich," states the Draft Contract.

It is also emphasized that the maximum amount that can be paid to subcontractors is 40 percent of the contract value.

The contractor will have to guarantee the good performance of the work through an unconditional bank guarantee in the amount of 10 percent of the contract value, or 69 million euros. The same amount is also the advance payment for the second section, which, depending on several conditions, should be paid within 21 days after the Chinese submit the bank guarantee.

The document states that the deadline for the preparation of a geotechnical study with a positive review is eight months, as well as eight months for geodetic bases, while a period of one year and two months is planned for the preparation of the main design of construction works with a positive review.

It is emphasized that the main design of the electromechanical works must be completed in a year and a half.

"The maximum amount of compensation for delay for key events is two percent of the contract amount. Compensation for delay in works is calculated in the amount of 0,03 of the accepted contract amount, for each day of delay. The maximum amount of compensation for delay for key events and the entire works cumulatively cannot exceed 7 percent of the accepted contract amount," the document states.

The Chinese contractor will have to submit proof of insurance two weeks before the start of work, while they will submit insurance policies 21 days after the start of work.

"The contractor is obliged to keep the contract data private and confidential, and may not publish or disclose them, nor any details from the contract, in any commercial or technical document or in communication with media representatives or elsewhere, without the prior written consent of the investor," the document states.

The company "PowerChina" is already working on or has completed billions of euros worth of projects in the Balkans, including infrastructure for the "Expo 2027" project in Serbia, part of the Belgrade metro and city bypasses, as well as the Herzegovina Bridge on the Neretva between Mostar and Čapljina, the "Ivovik" wind farm and the Kalinovik hydroelectric power plant. The company "Stecol" is their daughter company, while there is no information about "PCCD" on the internet.

The Turkish-Azerbaijani consortium "Cengiz-Azvirt" also participated in the tender for the second section, offering 735,01 million euros, the Chinese company "China Communications Construction Company" with 724,63 million, while the financial offer of the consortium "Shandong Foreign Economic & Technical Cooperation and Shandong Luqiao Group" was not considered, because they did not meet the conditions for opening the financial part of the offer.