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Ring road project awaits signing

The Bratislava ring road project continues to raise doubts.

Traffic in Bratislava(Source: Sme)

After participants of the tender to design, build, finance, operate and maintain a highway ring road project around Bratislava did not raise any objections and the cabinet approved signing of the concession agreement, the Transport Ministry is expected to sign it by the end of February, just a few days before the parliamentary elections.

The Ministry of Transport, Construction and Regional Development claims that there is no better solution than the construction of a Bratislava ring road to be completed with other measures to address the traffic situation in Slovakia’s capital city.

“There’s currently no other solution that can compare to this one,” said Transport, Construction and Regional Development Minister Ján Počiatek, adding that the construction of the bypass should be accompanied by building tramlines and changes to parking policies, while a toll fee for cars entering Bratislava might be considered as well.

The winner

The consortium Obchvat Nula led by Spanish Cintra Infraestructuras International won the tender when it offered to design, build, finance, operate and maintain the 59-km Bratislava ring road project within a public-private partnership (PPP) project for an annual instalment of €56.72 million. The ring road consists of D4 highway Jarovce – Ivanka, north – Rača and R7 dual carriageway Prievoz – Ketelec – Dunajská Lužná – Holice. The consortium, which features also Austrian Porr and Australian Macquarie Capital Group, offered the lowest instalment and plans to complete the ring road in four years and three months. This means that the ring road should be completed by 2020. The state will pay the company a total of €1.891 billion during a 30-year operation. An additional €350 million will go towards purchasing the land needed for the project.

Read also: Read also:Government approves the ring road project

The next lowest bid arrived from the ViaDunaj consortium consisting of Vinci and Meridiam (with an annual payment of €69.01 million) followed by the Bratislava consortium of Hochtief, Iridium and Dif (with an annual payment of €76.78 million). The Astrela consortium consisting of Strabag, Reding and John Laing offered to build the bypass for an annual payment of €91.04 million.

The ring road project is the biggest order of the second Fico cabinet while the only comparable project was the first PPP 52-km project involving construction of the R1 dual carriageway between Nitra and Tekovské Nemce and the bypass of Banská Bystrica.

Financing

One of the doubts from the side of critics of the D4/R7 project is whether it would not be financially more advantageous to finance the project directly from the state budget. It is not possible to finance the project from EU funds as the amount Slovakia has at disposal is already allocated for other road projects until 2020. The Transport Ministry also does not see realistic prospects for finding money for construction of the ring road in the state budget in the coming years, while postponement of the project would mean the loss of socio-economic benefits the project should bring.

“All analyses confirm the expedience of implementing this construction via PPP,” said Počiatek.

Another factor speaking for choosing a PPP project is that, in this case the expenditures would be not included into the general government debt, according to Počiatek.

In this respect Peter Goliaš, director of the INEKO think tank, pointed out that highway PPP projects create a systemic danger in the form or creation of a hidden debt for the state; in this way politicians can bypass rules about fiscal responsibility, for example the debt brake. To make this clear, he proposes including highway PPP projects into the general budget balance.

The Institute of Financial Policy (IFP), a governmental think tank at the Finance Ministry, has elaborated a comparison of financing of the project from the state budget and as a PPP. Thus if the construction of the ring road starts this year, the financing of the project from public finances would be €62 million more advantageous than financing via PPP. However, building the project financed from public finances would require a new tender, which would prolong the whole process by two years at least and IFP estimates that construction works would commence only in 2018. In such a scenario the PPP project comes out as €113 million more advantageous when the two-year social-economic benefits are estimated at €178 million. In case the construction starts in 2017, the PPP would be more advantageous by €26 million.

“Simultaneously both variants are more advantageous than the scenario in which nothing would happen,” said Martin Filko, the director and senior analyst of IFP.

Effects questioned

Several experts question the ability of the planned ring road to solve the transport situation in and around Bratislava, asserting that additional measures will be needed.

IFP, based on the available data and analyses, cannot say whether the ring road is the best solution for transport in Bratislava. Yet other alternatives, like building only the R7 and the Prievoz crossroad or railroad radials and an introduction of fees for cars entering Bratislava have not been evaluated. 

Ľubomír Palčák of the Research Institute of Transport (VÚD) agrees that the D4/R7 project would not solve all the problems and considers as inevitable to adopt measures to improve public transport in Bratislava. But such measures cannot replace the expected mission of the ring road.

Palčák estimates that during the first year after the D4/R7 project is completed, i.e. after four years, passenger transport would reduce by roughly 15 percent and cargo transport by 50 percent.

“Transport intensity on the ring road will be between 40,000-45,000 motor vehicles daily during the first year,” said Palčák as cited by the SITA newswire, while he believes that benefits would be lower in case only R7 is being built.

Ján Kovalčík, tranport analyst from the INEKO think tank, criticises the cabinet in that it has not checked whether smaller solutions would not have brought bigger effects. He is afraid that the new highways will only bring more cars into Bratislava and traffic jams would only move deeper into the city.

Opposition parties the Christian Democratic Movement (KDH) and the Freedom and Solidarity (SaS) party agree that there have not been presented any analyses confirming necessity of the ring road.

“Our main objection heads towards the fact that governing authorities have not proved so far in a trustworthy way whether the capital needs the ring road in the proposed form,” representatives of SaS wrote in a stance, pointing out that based on the opinion of independent experts, Bratislava is for most cars entering Bratislava its final destination and thus only a small portion of them will use the ring road.

“This is why traffic jams which the capital faces especially during traffic peak hours will remain or they will move into other localities of the city,” added SaS chair Richard Sulík as cited by the TASR newswire.     

Critics of the project also point to a very short period of time given for evaluation of the project when the Finance Ministry made its financial stance public only in the evening on February 15 while the cabinet discussed it on February 17.

Some opposition parties also oppose signing the contract before the parliamentary elections on March 5 and KDH and SaS call on the government to leave this move to the next cabinet.

To complete the ring road

To solve the transport situation in Bratislava thoroughly the Transport Ministry considers as needed also completion of the northern bypass of Bratislava including a tunnel via the Small Carpathians mountain range.

“It is necessary to deal with this construction and this is one of the candidates for continuation of PPP projects,” said Viktor Stromček, state secretary of the Transport Ministry.

Topic: Transport


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