Bechtel built 54 km of Transylvania Motorway for EUR 1.25 billion, but agreed to renegotiate contract

Newsroom 04/08/2011 | 13:36

Romania’s transport ministry, Anca Boagiu, said it hammered out a deal with U.S. contractor Bechtel for reducing construction costs of Transylvania motorway. Furthermore, building sections of the motorway will be up for auction, without objections from the American company. Sections where Bechtel works are in progress will be finished by 2013, at EUR 6, 9 million per kilometer.

Boagiu warned Bechtel that certain cost standards should be respected; otherwise chances for offering further contracts are minimum. If it were to respect the contract signed it 2004, the Romanian government will have had to pay approximately EUR 10 billion for 415 km of motorway, although the contract signed in 2004 stipulated that estimated costs for the complete motorway, should reach EUR 2.2 billion. Up to this point, 54 km of highway were inaugurated with a staggering price tag of 1.25 billion. For the building of future motorway sections, which will be up for auction, Boagiu estimates a cost of EUR 7, 3 million per kilometer. Thus, costs for the complete motorway will reach EUR 3.9 billion.

U.S. Ambassador, Mark Gitenstein, praised the breakthrough on Transylvania Motorway:
“I am pleased that both Bechtel and the Ministry of Transportation and Infrastructure were able to come together to reach a solution on this important project.  This result is a success for all parties, but especially for the people of Romania who will begin to enjoy the benefits of a modern highway system in these regions for years to come,” said Ambassador Gitenstein.
       
The renegotiation process involved the Romanian Government, president Traian Basescu and the American Embassy. The initial contract with Bechtel, for the 415 km motorway connecting Brasov and Oradea, was signed in 2004.

Ovidiu Posirca

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