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State to cap freeway construction costs

IF THE TRANSPORT Ministry gets its way, the state will henceforth set maximum prices for freeway construction contracts in an effort to reduce the danger of bid-rigging by cartels, and to lower the cost of building new roads.

"Our people will set expert price quotes for specific freeway sections that will be known in advance of any tender," said Transport Minister Ľubomír Vážny.

According to the Pravda daily, Vážny believes the measure could cut freeway construction costs by 10 percent.

"Our only aim is to make the construction of freeways and railways cheaper," the minister said. "The new price committee will have five pricing experts, and before tenders are called they will set a price that construction firms must be able to fit under. This will give us plenty of arguments in case construction firms try to manipulate the tender."

The measure comes in response to an ongoing case in which six construction firms were fined a total of Sk1.35 billion by the Anti-Monopoly Bureau for acting as a cartel and rigging a tender for the construction of a section of the D1 freeway bypass of Poprad between Mengusovce and Jánovce.

The European Commission has taken an interest in the case, as the freeway section was to be co-financed by EU funds.

Industry experts were cautious about the ministry's price-cap plan, however, warning that it might lead to interference with the market environment.

"We welcome measures to reduce prices as long as they are in keeping with market rules," said Ivan Majerský, the head of the Association of Construction Entrepreneurs.

"The goal is to prevent corruption, manipulation and backroom deals between firms. The measures must not be allowed to interfere with competition, however," said the head of the Research Institute of Transport in Žilina, Ľubomír Palčák.

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