7/30/2023 0 Comments Montenegro road to nowhere![]() ![]() The road is constructed by China Road and Bridge Corporation (CRBC), a state-owned Chinese company.Ĭhina has been widely criticised for saddling small countries with unmanageable debt as part of its global Belt and Road Initiative. If Montenegro cannot pay, it faces arbitration in Beijing and could be forced to give up control of key infrastructure, according to a copy of the contract seen by AFP. It is unclear where the money will come from or how Montenegro-a country with a GDP of 4.9 billion euros-will repay its existing debt to China. ![]() But the road is meant to connect the Adriatic port of Bar in the south with the Serbian border in the north, with the intention that the Serbians will then extend it to their capital, Belgrade. The section linking Matesevo to a town near the capital Podgorica-the most difficult part to build-is set to open in November. “I manage to sell some vegetables and chickens to the workers,” added the man who did not want to be named, reflecting also that dirt mounds from the construction site stop the river from flooding. Some managed to sell their land and leave, which was impossible before,” said one villager, whose two-storey home now sits meters from gargantuan concrete pillars propping up the four-lane highway. “This story has some good sides for us villagers. “However, the application is on hold, pending finalization of the EU-financed cost-benefit analysis for the entire Bar-Boljare highway, including on recommended construction standards and suggested means of financing for the remaining sections,” the report said.But locals are inclined to talk up the positives. In last year’s progress report on the country, the European Commission noted that Montenegro had applied for co-financing for the construction of the second section of the highway under the Western Balkans Investment Framework. The EU also has concerns about the highway’s costs. The studies were carried out in 20, but the previous government, which launched the highway project, had classified them as confidential. Another study, by another British consultancy, Scott Wilson Group, said it should cost $570 million. Last November, the Ministry of Capital Investments published two previously confidential international feasibility studies, which suggested that the estimated cost of the first phase of the Bar-Boljare highway had been exaggerated.Ī feasibility study by URS Infrastructure and Environment, a British engineering consultancy, said the first phase should cost $803 million euros. ![]() The ministry told BIRN that 141 million euros had been paid to the Chinese bank so far. On July 7, Minister of Finance Aleksandar Damjanovic said the project had been implemented without parliamentary control, warning that the total costs of the first phase could be as much as 1.2 billion euros. The first phase was due to finish by November 2019 but completion was delayed three times due to technical issues and the COVID-19 pandemic. In 2018, CRBC asked for another 115 million euros for subsequent works as well as the construction of a water supply and electricity network on the highway, which were not detailed in the contract. It was 85-per-cent financed by an $810-million-loan from China’s Exim Bank. The first 41-kilometre-long phase was built by the Chinese Road and Bridge Corporation, CRBC. On July 20, the Ministry for Capital Investments said the 23.5-kilometres-long second phase, running from Matesevo to Andrijevica, would likely cost some 552 million euros. The Bar-Boljare highway represents the Montenegrin leg of a larger highway that will run from the Adriatic coast to the Serbian capital, Belgrade. “A feasibility study is underway, which should show the real potential costs of building the remaining sections of the highway, which will help identify potential sources of financing,” it added. The government of Hungary, through the Hungarian Exim Bank, followed by the European Bank for Reconstruction and Development, EBRD, and the European Investment Bank, EIB, showed the most interest,” the ministry told BIRN. “So far, the ministry had talks with a large number of creditors who are interested in participating or completely taking over the refinancing of loans for highway construction. On July 13, Prime Minister Dritan Abazovic opened the first section of the highway, seven years after the Chinese-financed project started, and drove up Montenegro’s public debt to 90.85 per cent of GDP. Montenegro’s Ministry of Finance said on Wednesday that it is negotiating with European banks on financing the second phase of the Bar-Boljare highway. The first phase of the Montenegrin Bar-Boljare highway. ![]()
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