Austrians Exit €1.5 Billion Serb Highway Deal

Austria’s construction companies Alpine Bau GmbH and Porr AG say that they have pulled out of a €1.5 billion highway concession deal in Serbia after months of negotiations with the government.

“As of today the highway concession contract is terminated,” the statement said.

The consortium was given the concession last year to build a highway by 2012 from the northern town of Horgos to Pozega in the southwest, part of a wider plan for a highway running across Serbia to the Montenegrin coast.

In July, Serbia’s National Council for Infrastructure called on the government to annul the deal as the consortium made additional demands for guarantees of €200 million in annual tolls as well as a five-year extension of the deal.

Since then Austrian and Serbian government officials have been engaged in informal negotiations on how to terminate the contract, the statement said.

It added that Austrian consortium will wait for the outcome of 60-day mediation period before seeking international arbitration.

Most of Serbia’s road network fell into disrepair in the 1990s when the country was hit by sanctions for its role in the Yugoslav wars.

The government plans to invest five billion euros into various infrastructure projects over the next four years.

Source: Balkan Insight

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Posted by editor on Dec 17 2008. Filed under Economy, Invest-Inform, Region. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry