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Despite criticism, the Chinese are back in the race for the Montenegrin highway

October 15, 2024, 13:41 p.m Aleksandra Mudreลก / DW
Photo: Printskrin/YouTube/ Ministry of Capital Investments
Construction of highway in Montenegro
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Although they are under fire for their high indebtedness and corruption scandals, Chinese companies are still the main competitors for infrastructure projects in Montenegro.

To the tender for the continuation of construction highway Eight companies applied to Bar-Boljare - from China, Turkey and Azerbaijan. Among them is Chinese the CRBC company, which spent nine years building the first 40 km of the Montenegrin highway, writes Deutsche says.

The government in Podgorica says that the tender is conducted according to the rules of the European Bank for Reconstruction and Development (EBRD), which will partly finance the project.

"The company CCC, the umbrella company or as it is called the mother company CRBC, applied for the tender. But who will be chosen depends on whether they have fulfilled the requirements. It is possible that the right to build the second section of the highway will again be given to the Chinese CRBC", announced the Minister of Transport, Maja Vukiฤ‡eviฤ‡. At the same time, he emphasizes that the state company "Monteput" announced a tender for the contractor before it was chosen in July of this year, when the parties of the former Democratic Front entered the Montenegrin government.

Deputies of that pro-Serbian alliance openly favor Chinese companies in the media. Recently, speaking about investments from China in Montenegro, the deputy of the New Serbian Democracy, Dejan ฤuroviฤ‡, said that "potential Chinese investors for the second section of the highway could get the job, because they have proven to be correct contractors."

In 2014, Montenegro concluded a contract with the Chinese company CRBC on the construction of the first section of the Bar-Boljara road and took a loan of 944 million dollars from the Chinese Exim Bank. That loan was taken by the former Montenegrin government, with President Milo ฤukanoviฤ‡ at the helm, despite criticism due to high indebtedness, non-transparency of the tender process, possible corruption and the risk that the Chinese could seize state property as collateral.

The first section of the highway was opened to traffic in 2022, after several delays and increased construction costs. In a report published at the beginning of October by the American non-governmental organization, the International Forum for Democratic Studies, in the preparation of which the Montenegrin non-governmental organization MANS participated, it is stated that China exerts influence in Montenegro mainly through economic channels, "often using corruption among the political elites". .

Do the Chinese meet the European criteria?

The state-owned "Monteput" says that strict EU criteria eliminate any possibility of favoring certain companies, namely the bidder's legal and financial capacity, proven experience on similar projects, as well as compliance with international standards of environmental protection, social, health and safety norms.

When asked whether the European Bank for Reconstruction and Development will have "special" requirements due to China's growing economic influence on the Balkan countries, the director of the state-owned "Monteput" Milan Ljiljaniฤ‡ says that the EBRD has clearly defined criteria that must be respected. "The previous experience with the CRBC company has been positive. Let the best company win the tenders for the construction of future sections," said Ljiljaniฤ‡.

However, although two years have passed since the completion of construction and the official opening of the Podgorica-Mateลกevo โ€‹โ€‹highway section, the dispute between CRBC and the state of Montenegro as an investor has not yet been resolved as to who is to blame for the three-year delay in works and who should pay penalties to whom. And they can amount to fifty million euros per year of delay. The final decision in that dispute should be made by the Arbitration Court of the Chamber of Commerce in Zurich.

Official of the opposition Democratic Party of Socialists (DPS) and assistant professor at the Faculty of Mechanical Engineering of the University of Montenegro, Stefan ฤ†ulafiฤ‡, believes that the European Bank for Reconstruction and Development will not cause a problem if Chinese companies are again entrusted with the execution of the works.

"Chinese contractors are favored by readily available financing through state-owned banks such as Exim Bank, Bank of China and China Development Bank. The previous examples of the construction of a section of the highway between Warsaw and ลรณdลบ in Poland in 2009, the Peljeลกki bridge construction project in Croatia, as well as part of the Hungarian railway infrastructure on the section of the Budapest-Belgrade railway show that Chinese construction companies are becoming more and more active in the difficult EU market. points out ฤ†ulafiฤ‡.

New roads until 2030?

The Mateลกevo-Andrijevica section is about 22 kilometers long, which is close to 14 percent of the total route of the Bar-Boljare highway. The EBRD announced that the construction costs of the second section will amount to around 530 million euros, and it has already secured a loan of 200 million.

The director of "Monteput" Milan Ljiljaniฤ‡ says that the signing of the design and construction contract is planned for the first half of 2025, and the completion of the works is expected in 2030.

Opposition member Stefan ฤ†ulafiฤ‡ believes that it is not realistic for the works to start in the first half of next year, and he sees the reasons for extending the deadlines in geodetic works and expropriation, and in parallel with that, he says, other problems may arise.

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The Chinese Montenegro Construction highway
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