Romania, Bechtel Negotiate New Deadline For Transylvania Highway - Sources

05.01.2011 By Bostan Radu

Romania's Transport Ministry and public road authority CNADNR have begun negotiations with Bechtel on a new calendar for the construction of the Transylvania Highway, with new deadlines past the current December 2012.

Because of budgetary constraints and delays in paying for work carried out in 2010, Bechtel has slowed down the work and reduced the size of the construction crews on site. The Transport Ministry, CNADNR and Bechtel are in negotiations regarding a payment schedule, cost standards and work resumption. Once these issues are cleared, a new calendar and deadlines can be set, people close to the matter told MEDIAFAX.

The construction of the Transylvania Highway, which links central Brasov to western Bors on the Hungarian border, began in 2004 with a EUR2.2 billion contract awarded to U.

S. constructor Bechtel. Work was halted in mid-2005, when Romanian authorities started looking into contracts signed by the previous administration. The project's deadline was extended to the end of 2013 from 2012.

The highway is designed to be 415 km long, but only 10% has been built so far.

Transport Minister Anca Boagiu said recently, in an interview with Ziarul Financiar, that the ministry has no money for Bechtel, "at least until the summer's budget revision."

According to the investment file included in the ministry's budget for this year, the project is to receive a further 8.5 billion lei (EUR2.085 billion), out of a total RON12.7 billion, approved initially.

Last year, the ministry paid Bechtel RON965.1 million, including RON867.8 million in debts from 2009.

A recent ministry document said this year's budget provides RON148 million for the Transylvania Highway, while debts stood at more than RON600 million at the end of last year.

The document also said the state owes Bechtel EUR104 million. Penalties for late payment amount to EUR2.28 million. (EUR1=RON4.0744).