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How much did the jump in market prices affect the construction of the road?

Serbia plans to take a third loan for the Moravian Corridor in the amount of 700 million euros. The loan was confirmed in the Parliament of Serbia. In the explanation for the new borrowing, it is stated that the money will be used to finance the construction services of the American-Turkish consortium Bechtel-Enka, and the funds will be used by the company Corridors of Serbia.

The question arises whether additional works are being financed or something that should have already been done within the original contract. The original contract for the construction of the 110-kilometer Moravian Corridor was signed for 900 million euros.

For the former Minister of Transport, Zoran Mihajlović, new borrowing is controversial. He believes that it is happening because the Serbian side did not respect the dynamics of the works.

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“It is very clear in the contract that if there is a problem on the American side, the Serbian side can impose very high penalties, just as the American side can do the same to the Serbian side. So I would not be surprised if in this new assignment there are parts where the Serbian side did not do its job – regarding the loan, the quarry, the expropriation which is going slowly…” Mihajlović said.

She says that the contract stipulates that the price of services will increase in case of, for example, an increase in the price of raw materials.

Mihajlović adds that the highway, along with the digital corridor and flood protection, was supposed to be finished by 2024, and now he estimates the end of the works by 2027.

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For the organization Transparency Serbia, there are several disputed moments in connection with the Moravian Corridor, and one of them is the lex specialis, which circumvented the Law on Public Procurement.
“It was agreed to hire a strategic partner of the Government of Serbia for the construction of that corridor in a procedure that was created only for that one project and with conditions and criteria that were obviously adapted to the company that eventually got the job,” Nemanja Nenadić said.

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