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Romania Might Terminate Bechtel’s Contract Unless It Fixes Damaged Segment

Romanian authorities might terminate their contract with U.S. company Bechtel for the Transylvania Motorway if the constructor refuses to pay repair costs at the road segment affected by landslides, Transportation Minister Ludovic Orban said Friday.
Romania Might Terminate Bechtel’s Contract Unless It Fixes Damaged Segment
14 nov. 2008, 13:14, English

“Bechtel has to pay. I doubt they will sue us (the Transportation Ministry – e.n.) for the repairs, because in that case they will be left with the two road segments under construction and a bad image,” Orban said.

The Romanian roads authority CNADNR said last week Bechtel has made several design and execution errors at the Transylvania Motorway, which triggered landslides on a surface of 36 kilometers on the motorway.

Bechtel sidetracked a few times, which hurt the quality of the construction, but the errors can be fixed and there will be no delays, CNADNR said, citing the results of an analysis conducted by consultancy firm EGIS Scetauroute.

Repair costs are estimated at EUR100 million.

However, Bechtel said in a reply that CNADNR sent incomplete information to the media, which contained dramatic accusations.

The American company said design at the Transylvania Motorway was carried out based on a study approved by CNADNR itself and that the regulator’s statements were clearly exaggerated.

Works at the Transylvania Motorway, to link central city of Brasov to western Bors, started in 2004, based on a contract worth EUR2.2 billion attributed to Bechtel.

Works halted mid-2005, when authorities started looking into contracts concluded under the previous government. The highway is due for completion in 2013.

By mid-August, Bechtel managed to finalize five kilometers out of the total 25-kilometer segment of motorway that connects the cities of Gilau and Campia Turzii.

According to the Transportation Ministry, other constructors beside Bechtel might carry out works at the Transylvania Motorway if the European Commission approves the new EU corridor on the North-South axis.

The corridor includes the Romanian motorway and will be financed from EU funds.

“When the European Commission approves the new corridor, probably next year, its route on Romanian territory will become eligible for EU financing. This means that we can bring other constructors apart from Bechtel for the Transylvania Motorway,” Orban said Friday.