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Tusk drops Chinese COVEC building the A2 motorway


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boletusThreads: 47
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Joined: Apr 13, 11 ♂ 		 Jun 10, 11, 11:48    #61
Monia:
Main reason which is not mentioned here is the fact that Chinese are boycotted by suppliers who do not supply them sufficiently with products needed for road construction. Especially they are boycotted by concrete producers ( international corp with mixed polish capital ).

Yes, I have heard about it. The suppliers decisively deny any wrongdoings.


Highway A2: negotiations are so secret that it is not known whether they actually happened

According to unofficial information GDDKiA wants to entrust the completion of the A2 to other companies, without the tender.

Minister of Infrastructure Cezary Grabarczyk argued yesterday in parliament, the Sejm, that the roads are being built at a good pace. The Sejm, however, has not heard any specifics on the situation on the two key sections of the highway between Łódź and Warsaw, which the Chinese want to abandon.

Completing the work without going through a tender would not be a precedent. For example, the city of Wroclaw has removed an original contractor from stadium construction and entrusted the work to another contractor. This decision was taken to the European Commission and the eventual defeat of Wrocław will mean massive damages to be paid.

The presidents of the largest construction firms, interviewed by our editorial staff, responded that it is still possible that the highway will be usable in June 2012.

- This would mean entering the construction site in the next dozen or so days and starting working on three shifts - says President Bu-dimex Mark Blocher. Unofficially, we have heard that in such scenario the cost of construction will grow up by 600 million to 1 billion more than the price of 1.3 billion, negotiated with the Chinese.

There are growing doubts about the credibility of the COVEC. We have no contact with them, but the Polish PR company, which works for them, argues that - according to a reputable website of the construction industry "Engineering News Report" - they are the 127th biggest company in Asia.

A simple verification shows that the supposedly reputable website belongs ... to the same company that owns the domain Covec.com, or Network Solutions, llc. This American company offers services on the Internet, such as creation of mutually linked Web pages, to add credibility to their customers.

The original financial documents of Chinese COVEC show that their cash flow in 2009 was about 1.7 billion zł - that is, only slightly more than the value of the contract for the construction of two sections of A2.

What do we actually know about the COVEC? It was established in 1987, and for several years his sole shareholder has been the China Railway Group Limited.

Thomas Starzyk, with a reputable business information agency Dun & Bradstreet, told us that he ranks them at 5, on scale 1 to 10, with 7 being an average for the construction industry. - Our assessment of China Railway is even worse - he said.

Polish source, Gazeta Prawna, http://biznes.gazetaprawna.pl/artykuly/522072,autostrada_a2_negocjacje _tak_tajne_ze_nie_wiadomo_czy_byly.html
boletusThreads: 47
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Joined: Apr 13, 11 ♂ 		Edited by: boletus  Jun 10, 11, 20:54    #62
Monia:
boycotted by suppliers

Apparently there is more to that than I thought. So yes, a clean good bye seems the best of bad options.

Will Chinese move from Poland to Hungary?
According to our source the Chinese consortium COVEC, constructing highway A2, won the tender for the construction of an airport in Hungary. The Chinese therefore might be no longer interested in continuing work on the A2. It may be possible that this new contract is influencing the Chinese to protracted talks with GDDiK.
http://www.tvn24.pl/-1,1706369,0,1,chinczycy-przeniosa-sie-z-polski-na -wegry,wiadomosc.html
(…)
According to experts, COVEC underestimated how hermetic the Polish market is. Native contractors have long ago divided the country regions among themselves and they do not interfere with a process of winning contracts by the others. This is why they waited for a new rival from such a big country, which can easily provide cheap labour, with such an anxiety. However, Polish companies have found a weak point of COVEC - lack of specialists who know the language, the Polish law and the twists and turns of the complicated bureaucracy.

- This is the problem the Chinese business faces everywhere in Europe. In Poland it is so much greater, because finding engineers cost them more than they have bargained for - says a market analyst. The same was true with contractors. No one seemed eager to work with the Chinese, because he knew that if he accepted such an order the Polish contractors will not forgive him and he will be literally "cut" of the market - tells us a person with the industry.

Those who have decided to cooperate, demanded exorbitant rates, and - in addition - were systematically "warned" againsted further cooperation. - This practice is an open secret - says the analyst.

The Chinese have problem not only with specialists and subcontractors but also with a "civilization leap", which emerged since the UEFA has awarded us the rights to host Euro 2012. Prices of building materials in Poland, where strategic investments are carried out, went up sharply.

- Imagine that the price of sand, for example in the area motorway A2 under construction, has increased from several to tens of złoty per ton. Seller knows that the client is at his mercy, because the time limits he chases, so he will not be fussy - says a person with the road industry.

Everything changed when COVEC realized that they might get their references (to European market) somewhere else - and with a smaller financial loss. This is why they recently put forward the matter differently - they want to negotiate a better price, and they have their arguments. The GDDKiA agency knows well that full recovery of damages is almost impossible.

- Banks will pay 130 million guarantee, that's for sure. But what about the rest of the 741 million zloty penalty, written in contract? COVEC in Poland has only a desk with a secretary. Therefore the full recovery amounts to a dream. Polish side knows that it is irresponsible to throw COVEC out just like this. So they must negotiate - says the analyst.
Translated from Polish source: http://www.tvn24.pl/-1,1706369,0,1,chinczycy-przeniosa-sie-z-polski-na -wegry,wiadomosc.html
delphiandomineThreads: 42
Posts: 9,954
Joined: Nov 25, 08 ♂ [Suspended] 		 Jun 11, 11, 12:04    #63
boletus:
Apparently there is more to that than I thought.


Very interesting to see that the Chinese have had their usual tactics used against them in Poland.
boletusThreads: 47
Posts: 1,095
Joined: Apr 13, 11 ♂ 		 Jun 12, 11, 23:19    #64
The Chinese will not be building the A2, and there will be a new tender call - this is the most probable decision regarding the construction of the highway from Łódź to Warsaw - reports Mariusz Gierszewski, Radio ZET. He learned about this from "the government circles".

http://auto.dziennik.pl/artykuly/340523,co-z-chinczykami-na-a2-decyzja -zapadla.html
Wait … Here is another little jewel:
The Polish side will want to recover 130 million zlotys of bank guarantees. Realistically, only 10 million zloty is to be easily recovered since it was guaranteed by Deutsche Bank. The remaining sum was underwritten by Chinese banks and recovery of that money may not be easy.

Well, if this is true then this sounds like a pure comedy, "gra w chińczyka".
But since this news seems to be a non-confirmed gossip I'll skip the rest of the message and wait for tomorrow's news and details.
PennBoyThreads: 157
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Joined: Dec 7, 08  Pictures: 2 ♂ 		 Jun 12, 11, 23:51    #65
boletus:
Wait … Here is another little jewel:
The Polish side will want to recover 130 million zlotys of bank guarantees. Realistically, only 10 million zloty is to be easily recovered since it was guaranteed by Deutsche Bank. The remaining sum was underwritten by Chinese banks and recovery of that money may not be easy.

Great so Poland will lose 120 milion zl and have to find a whole other contractor. They should just stick to European firms from now on.
boletusThreads: 47
Posts: 1,095
Joined: Apr 13, 11 ♂ 		 Jun 13, 11, 13:34    #66
No answers yet on A2, the lawyers seem to be working very hard to avoid any mistakes. I understand that.. :-)

In meantime - see the current status of motorways' construction, from money.pl
Legend:
black - existing
green, continuous - under construction
green, dashed - tender and preparation
yellow - endangered
orange - motorway network as promised by PO

Motorways in Poland
Motorways in Poland
boletusThreads: 47
Posts: 1,095
Joined: Apr 13, 11 ♂ 		 Jun 13, 11, 16:16    #67
Agencies, which were checking the COVEC, did not notice that the Chinese consortium has already failed in one construction in Poland - says RMF FM. Three years ago the company won the tender for the construction of hotel Gromada in Cracow. The pattern was similar to that of the A2 projects. The Chinese did not deliver on time, had too few workers and they changed subcontractors like gloves. The result? To finish the project Gromada had to add extra 20 million zlotys.

"The cost of the construction, if we close it, will be 40 percent higher than that which was negotiated. I would never again fall into a trap of price" - says the Gromada president, Jan Blonski.

The same problems arose during the construction of A2. The government will now have to pay a fortune to finish the road ahead of Euro 2012.
Translated from: http://gospodarka.dziennik.pl/news/artykuly/340669,a2-to-nie-pierwsza- polska-kleska-covec.html
PennBoyThreads: 157
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Joined: Dec 7, 08  Pictures: 2 ♂ 		 Jun 13, 11, 16:43    #68
Chinese built roads..... http://shanghaiist.com/2011/05/31/in_changchun_giant_pothole_swallows. php
http://english.sina.com/china/p/2011/0426/370664.html
boletusThreads: 47
Posts: 1,095
Joined: Apr 13, 11 ♂ 		 Jun 13, 11, 16:51    #69
I saw the first picture some time ago. It is actually a hole in a bridge. Luckily the driver escaped unharmed - so we may laugh here at their technology.
PennBoyThreads: 157
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Joined: Dec 7, 08  Pictures: 2 ♂ 		 Jun 13, 11, 16:56    #70
boletus:
I saw the first picture some time ago. It is actually a hole in a bridge. Luckily the driver escaped unharmed - so we may laugh here at their technology.

Bridge or no bridge the road didn't hold the weight of the truck, just like in the second set of photos.
boletus:
In meantime - see the current status of motorways' construction, from money.pl

Lodz is in a great position center of the country. It will benefit from a whole network of motorways and in a few years that high speed rail line, maybe even a central airport if they go ahead and build it.
boletusThreads: 47
Posts: 1,095
Joined: Apr 13, 11 ♂ 		 Jun 13, 11, 20:18    #71
COVEC is out - decided GDDKiA . - We are now analyzing two lawful solutions: either a tender or the negotiations - said the deputy director of GDDKiA, Andrzej Maciejewski.
- There are two sections of the road to be built: A and C, but we still do not know whether they will be handled by one or by two contractors. The next 14 days is a period for the decision to become bounding. The Chinese have been informed about it - said Maciejewski at a press conference.
- We have talked so far with 16 companies, which expressed interest in the contract. There are still others contacting us and we will be analyzing their offers. Public Procurement Law gives us the opportunity to resume the work as soon as in July. The interested companies are examining the construction site, and they will have to determine when they can start and how much do they want - he added.

Maciejewski announced that GDDKiA intends to pursue the compensation of 741 million zł from the Chinese. - This is to be compensation for lost toll revenue collectable from drivers at the tool gates.
- Bank guarantees of 130 million PLN are secure in the COVEC accounts - he added.

Who has made a mistake? Who will not get the money?

When asked about the settlement of amounts owed to subcontractors by COVEC, which approximately amounts to a total of several tens of million zł, he mentioned a number of 20 subcontractors, approved by the GDDKiA, and who - in accordance with his previous promises - will be paid by the investor, GDDKiA.
- But there is a lot more of the subcontractors, which are not approved yet. From what I remember, there are 60 or more such companies in the section C alone - said Maciejewski.

Responding to Chinese allegations that GDDKiA also did not pay on time and that there were unexpected difficulties in the market - he said: "The General Directorate has done everything required for the investment to be carried out in accordance with state of the art. It is up to the contractor to make calculation of the exchange rate risk, or of changes in prices of building materials".

Maciejewski also assured once again that almost certainly the work will be resumed in July, so that the motorway A2 will be drivable by the of May 2012, as planned.
Translated from Polish source: http://www.tvn24.pl/-1,1706739,0,1,chinczycy-nie-dokoncza-a2,wiadomosc .html
boletusThreads: 47
Posts: 1,095
Joined: Apr 13, 11 ♂ 		 Jun 18, 11, 15:36    #72
translated from http://www.tvn24.pl/-1,1707366,0,1,covec-niemile-przyjety-w-polsce,wia domosc.html
COVEC has met with an unpleasant welcome in Poland.

Chinese papers say that the company COVEC, which was to built two sections of A2 motorway in Poland, was met with an unpleasant welcome in our country. On Saturday, the English-language "China Daily" reprinted excerpts from the Friday's article of Chinese journal "Renmin Ribao", which is considered the mouthpiece of the Chinese government.

"Despite the best efforts of the Chinese, the Polish side almost deliberately interfered in the work, and even attempted to resort to diplomatic means to politicize the issue" - says the author of the article entitled "China's company has met with an unpleasant welcome in Poland."

 Due to the fact that the Polish side has significantly raised the construction standards, and because of the rising prices of construction materials and unforeseen geological conditions, the cost of project has risen exorbitantly. The Chinese company would therefore have to add $393.34 million dollars of its own money to the project.

ETC, etc..
China does not like loosing face. Never. Now we are at war with Chinese propaganda.
PennBoyThreads: 157
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Joined: Dec 7, 08  Pictures: 2 ♂ 		 Jun 18, 11, 15:47    #73
boletus:
China does not like loosing face.

Oh tough luck. So who are the potential new builders since the Chinese are out?
gumishuThreads: 17
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Joined: Apr 6, 09  Pictures: 1 ♂ 		 Jun 18, 11, 18:28    #74
boletus:
Responding to Chinese allegations that GDDKiA also did not pay on time and that there were unexpected difficulties in the market - he said: "The General Directorate has done everything required for the investment to be carried out in accordance with state of the art. It is up to the contractor to make calculation of the exchange rate risk, or of changes in prices of building materials".


I don't trust such statements - especially that more companies reflected on the late payments from GDDKiA
boletusThreads: 47
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Joined: Apr 13, 11 ♂ 		 Jun 18, 11, 18:48    #75
gumishu:
I don't trust such statements - especially that more companies reflected on the late payments from GDDKiA

If you care to read again the detailed complain note from COVEC, which I translated here, they did not actually said that GDDKiA was ever late. All they said was that GDDKiA delayed until the last moment - according to the contract agreement - of 59 days after receiving their invoice.
gumishuThreads: 17
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Joined: Apr 6, 09  Pictures: 1 ♂ 		Edited by: gumishu  Jun 18, 11, 18:55    #76
boletus:
All they said was that GDDKiA delayed until the last moment - according to the contract agreement - of 59 days after receiving their invoice.


they also mention unsufficiently recognized geological conditions which if true can't be a fault of COVEC - and that GDDKiA ignored any complaints from the Chinese about that - I don't think GDDKiA is so very competent - very late payments also tell a thing - it's not that GDDKiA is bursting with cash or perhaps that some machinations were in place to throw the Chinese out of business
delphiandomineThreads: 42
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Joined: Nov 25, 08 ♂ [Suspended] 		 Jun 18, 11, 19:10    #77
gumishu:
they also mention unsufficiently recognized geological conditions which if true can't be a fault of COVEC - and that GDDKiA ignored any complaints from the Chinese about that - I don't think GDDKiA is so very competent - very late payments also tell a thing - it's not that GDDKiA is bursting with cash or perhaps that some machinations were in place to throw the Chinese out of business


Gumishu, something to consider - is it not possible that Poland has pulled a fast one on the Chinese here?

It depends on the exact mathematics of the situation - but if Poland has managed to get some of the A2 built for a ridiculously low price, then it's actually a masterstroke by GDDKiA. It's certain that the Chinese have been victims of some very dirty tricks - but - well - isn't this the rules they play by, too?
boletusThreads: 47
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Joined: Apr 13, 11 ♂ 		 Jun 28, 11, 09:45    #78
The European Investment Bank (EIB) has approved a further € 800 million loan to support the construction of motorways linking Poland with its neighbouring countries.


http://www.khl.com/magazines/construction-europe/detail/item65332/EIB- in-/?-800-million-Polish-road-loan/
That's for:
A1 - 36 km stretch
A4 - 135 km
S19 (near Rzeszów) - 5 km
The Polish transport sector is the major beneficiary of EIB loans in the country. Since 1990, the EIB has lent € 12,5 billion in support of transport projects in the country, including the construction of new motorway sections on the A1, A2, A4 and A6 motorways, and major national roads along Pan-European Corridors II, III and VI.
PennBoyThreads: 157
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Joined: Dec 7, 08  Pictures: 2 ♂ 		 Jul 6, 11, 15:45    #79
Troubled A2 construction opened up to other contractors
http://www.thenews.pl/1/12/Artykul/51051,Troubled-A2-construction-open ed-up-to-other-contractors
boletusThreads: 47
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Joined: Apr 13, 11 ♂ 		Edited by: boletus  Jul 6, 11, 16:51    #80
That's good, but the bad news is that half of the promised highways won't be ready for Euro.
http://wyborcza.pl/1,75248,9892556,Autostrady_na_Euro_w_polu__Polowa_n ie_powstanie.html
WroclawThreads: 77
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Joined: Apr 1, 06  Pictures: 3 ♂ [Moderator] 		 Jul 6, 11, 16:54    #81
boletus:
But, the bad news is that half of the promised highways won't be ready for Euro.


i think most of us knew that months, if not years ago.
boletusThreads: 47
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Joined: Apr 13, 11 ♂ 		Edited by: boletus  Jul 6, 11, 17:03    #82
Wroclaw:
think most of us knew that months, if not years ago.

Yes, but I forgot to add that the article I cited provides all progress details: percentage of work done, percentage of days spent, etc. Source: an official GDDiK document sent to ministry of infrastructure.
pipThreads: 11
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Joined: Jul 4, 11 ♀ 		 Jul 6, 11, 18:05    #83
They should have just let Skanska do the entire road- then we can all be certain that it will be done correctly.
Monia  Jul 6, 11, 22:49    #84
It doesn`t matter that all roads will not be created before Euro 2012. The government is not responsible for all delays .In most cases it is the contractor`s fault and it is them who are unable to meet the deadlines.

The investment process is not just about building roads in the area, it takes years and is long lasting. Responsibility should be put on the previous governments for which the construction of roads in the country iwas not PRIORITY, . Thousands of kilometers of motorways and expressways can not be built in just one year. .

Let be optimistic that, however much at the moment is being built and plans to build more sections are being implemented. I think however that by 2015 all but planned roads will be completed
SeanusThreads: 22
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Joined: Dec 25, 07 ♂ 		 Jul 6, 11, 22:54    #85
Tusk couldn't be seen to have a chink in his armour ;) ;) ;) Only those with strong English will get this :)

Tusk backtracking? Not a good sign. Things have to be just right for Euro 2012.
PennBoyThreads: 157
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Joined: Dec 7, 08  Pictures: 2 ♂ 		 Jul 6, 11, 23:04    #86
Seanus:
Tusk couldn't be seen to have a chink in his armour

I had to stop and think for a second my first thought was a derogatory term for a Chinese.
SeanusThreads: 22
Posts: 30,158
Joined: Dec 25, 07 ♂ 		 Jul 6, 11, 23:10    #87
It's a play on words. I have a Taiwanese-American friend and she would be ok with me using wink marks :) :)

The Chinese are efficient and would have gotten the job done well. Just don't hire those from Montenegro, they are on a par with old commies for laziness. 'Czy się stoi, czy się leży, dwa tysiące (2000) się należy' :) :) The Chinese don't know this :)

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