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Construction of Bratislava bypass via PPP project could be overpriced

BUILDING a bypass around Bratislava via the so-called PPP (public-private partnership) project might be overpriced by €1 billion compared to a standard form of construction.

(Source: Sme)

This is a result of an analysis carried out by the think tank Economic and Social Reforms Institute (INEKO) presented at a press conference on October 12.

“Based on our analysis, the construction of this bypass could be overpriced by €1 billion compared to a traditional public procurement,” INEKO director Peter Goliaš said as cited by the TASR newswire, adding that at the same time, if the project is carried out, a concealed state debt equal to 2-3 percent of GDP might emerge.

INEKO also believes that an implementation study that compared the bypass’ construction via a PPP project to a standard model was carried out in haste and involved a conflict of interest. It has found several faults in the study, including an excessive estimate of the construction costs and financing for a standard construction variant. Also calculating advantages for road users were inconsistent.

“A great amount of distortion favours the PPP project,” explained Marian Jánoš from INEKO.

INEKO also believes that the Construction Ministry has committed several failures. For example, the ministry has decided about building the bypass via a PPP project without key data on transport.

“Until today the ministry does not know what share of traffic from the overburdened D1 highway sections in Bratislava the D4 highway would take over,” said Ján Kovalčík from INEKO, pointing out that the announced D4 would mainly help with transit transport, which is only marginal in Bratislava, however.

According to Kovalčík, it is worth looking at possible solutions to key transport, i.e. the city’s internal transport system and daily commuting for work within Bratislava or from the region towards the capital as this is the transport that dominates and overburdens traffic and roads in Bratislava. INEKO assumes that after the completion of the bypass, transport on the Prístavný (Port) Bridge will drop by only 13 percent.

“Alas, [the bypass] will solve less than was originally expected,” said Kovalčík.

INEKO calls on the ministry to halt the public procurement process, that has refused to do so.

The Construction Ministry responded that it would be possible to speak about costs of this project and its effectiveness only after the ongoing tender generates the best offer, while it hopes to sign the contract by the end of the year. Conditions of financing should be agreed upon in early 2016, while the launch of construction works should follow.  

The ministry is holding talks with consortia led by Strabag AG, Hochtief Solutions GmbH, Cintra Infraestrucruras Internacional and Vinci Concessions Slovakia. The project includes construction of D4 highway Jarovce - Ivanka, north - Rača and R7 dual carriageway Prievoz - Ketelec - Dunajská Lužná - Holice totalling 59 kilometres. The assumed sum of the concession for 30 years is €4.53 billion and the assumed annual instalment of the state may amount to €135 million, while construction costs are estimated at €1.325 billion. The tender should reduce the assumed instalment and construction costs.

Topic: Transport


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