BUSINESS IN SHORT

Slovakia launches its first PPP project

SLOVAKIA has kicked off its first ever public-private partnership (PPP) project. The agreement covers the construction of the R1 dual carriageway from Nitra to Tekovské Nemce. Slovakia’s Ministry for Transport, Posts, and Telecommunications considers the agreement concluded with the Granvia consortium a clear success for the country, the SITA newswire reported.

SLOVAKIA has kicked off its first ever public-private partnership (PPP) project. The agreement covers the construction of the R1 dual carriageway from Nitra to Tekovské Nemce. Slovakia’s Ministry for Transport, Posts, and Telecommunications considers the agreement concluded with the Granvia consortium a clear success for the country, the SITA newswire reported.

The ministry says the agreement provides the bedrock for construction of the 52 kilometre road.

The current value of payments Slovakia will transmit to the company over 30 years for the road’s construction and operation is €1.757 billion and three sections of the project should be completed in July and September 2011 and in July 2012.

“We’ve had long and hard negotiations and the result is a contract that compares with similar contracts in Europe, while at the most important points we’ve achieved more than other countries who have more experience with PPP projects,” Transport Minister Ľubomír Vážny said, as quoted by SITA.

Vážny said he was particularly proud that the final deal requires that profits from the project will be divided between the state and the consortium and that in the first period Slovakia will get 90 percent of the profits and later, a lowered amount of 75 percent. Vážny said the European average in the division of profits is 50:50.


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