Road Construction Tycoons Drop EUR100M Claims To Keep Moara Vlasiei-Ploiesti Highway Contract

05.26.2011 ZF English

The four builders of the Moara Vlasiei-Ploiesti highway--Spedition UMB, Tehnostrade (both controlled by Dorinel Umbrarescu), Euroconstruct Trading '98 (Dan Besciu) and PA&CO International (Costel Casuneanu)--have dropped their claim for the contract value to be increased by 47%, namely the equivalent of over EUR110 million.

This is the first time that the Transport Ministry manages to put its foot down in the case of a contract of this size and persuade the constructors to work without any further contract addenda.

The initial contract amounted to 702.6 million lei (EUR199 million), but the Romanian Highway Company (CNADNR) signed an addendum with the construction companies in 2009, by which the cost of works on the Moara Vlasiei-Ploiesti section was raised by 25%, to RON883.7 million (EUR242 million).

The road company has so far paid around RON671 million to the consortium that is building the Moara Vlasiei-Ploiesti section, which means over 75% of the overall cost.

A month ago, the highway company sent the contractors a contract termination notice, after the companies controlled by the three "road construction tycoons" had requested a 47% increase in the value of the contract and had abandoned work on an almost 2-km stretch of the 42.5-km section for 16 months.

However, the companies yesterday agreed, through the signing of an addendum acknowledging an amicable settlement of the problems, to give up the right to request any further extension of the deadline, additional costs, penalties, compensations or any other financial or material claims, according to a release of the highway company.