When Poland started handing out billions of euros worth of contracts for a wave of road-building five years ago, everyone was meant to benefit.
Poland would bring its decrepit transport system into the 21st century, European construction firms would win contracts at a time of recession, and the European Union, whose cash helped fund the work, could point to how it was helping.
Poland got its roads, for the most part. But in many other ways the enterprise, one of the biggest construction projects in Europe, went seriously wrong. Several contractors are in legal battles to recover billions of euros they say Poland owes them. Dozens of Polish companies are in bankruptcy, and multinational firms have blamed losses on the Polish contracts . Six European governments have complained to Poland about the way their companies have been treated. The European Commission is investigating what went wrong.
This is not so much a story of corruption as of cost-cutting zeal. Poland stuck to its budget and the prices agreed in its contracts. That was the problem. In an industry where firms routinely bid as low as possible and costs routinely overrun, Poland frequently refused to budge on cost. In its drive to keep costs down, it also ignored warnings - including some from independent engineers hired by the state - that designs and plans needed to be changed.
The drive to economize was repeated on dozens of projects, industry groups and construction company executives say, and left many involved in the projects struggling. One of the biggest losers was Alpine Holding GmbH, the Austrian unit of Spanish group FCC, which enteredbankruptcy proceedings in June, becoming Austria's biggest corporate collapse since World War Two.
A project that should have been a bonanza for Europe has turned into "a slaughter house for Polish and European firms," Jaroslaw Duszewski, a former Alpine executive, wrote to the head of the Polish state roads agency in June this year. A spokesman for FCC declined to comment.
Five other firms have told Reuters they are still in dispute with the road agency over payment: Austria's Strabag, the Polish unit of Germany's Bilfinger, Ireland's SIAC, a joint venture of Ireland's Sisk and Roadbridge called SRB, and Budimex, a Polish unit of Spain's Ferrovial. All but one said they had filed suits against the state road agency which were unresolved. Bilfinger's subsidiary said it was seeking to resolve the dispute out of court.
Polish Prime Minister Donald Tusk has defended his officials, and said Poland will not bow to foreign pressure.
Source: Reuters
