Pelješac bridge – an interesting case of infrastructure project under the Belt and Road, funded with EU money

Pelješac bridge – an interesting case of infrastructure project under the Belt and Road, funded with EU money

By Marcela GANEA

 

Between 10-12 April 2019, in Dubrovnik, the 8th edition of the 16+1 CEEC-China summit took place and Li Keqiang, the Chinese Prime Minister, was present.

Apart from meetings with the Croatian officials, bilateral meetings, the press conference and formal statements, one interesting moment took place on 11 April when Andrej Plenković, the Croatian prime minister, and Li Keqiang, the Chinese prime minister, visited the construction site of the Pelješac bridge.

The Pelješac bridge is an interesting case of big infrastructure built by a Chinese company and seen as part of the Belt and Road initiative, and funded with EU money.

The bridge will connect the Croatian mainland with the Dubrovnik–Neretva area, that is, the Gulf of Mali Ston between Komarna and Brijesta on Pelješac in the Dubrovnik-Neretva County. The design and the construction will be an outstanding challenge: the location of the bridge is subject to strong winds and to a significant seismic activity.  It will have 2.4 kilometres, 55 metres height and 4 lanes. It will cost around 420 million euros, it is being built by a Chinese company, the China Road and Bridge Corporation, and it is scheduled to open in 2021. The first 74-metre long test pile was hammered in the seabed on 11 January 2019. The contract for its construction was signed on 23 April 2018 between Hrvatske Ceste and the Chinese consortium China Road and Bridge Corporation, with 85% of that cost to be covered by EU funds.

The Pelješac bridge project arouses interest. It is the first time when a project funded mostly with European Union money has been won by a Chinese company.

Both Croatia and China are very proud of this project.

For Croatia, it is the biggest infrastructure project ever, a great success and a symbolic reunification. As bridges are symbols in politics and diplomacy, Croatia has thus solved its problem of reuniting the mainland with a part of the country that had been separated. In addition, the project is suggestive for Croatia’s ability to implement huge infrastructure projects, its preparedness to put to good use the EU funds and its prowess to work with China, which is not easy. For most Western European countries, as previously shown by research studies and many media pieces, China is not an easy partner to deal with because of lack of knowledge about the Chinese working style, the Chinese culture and the specifics of the Chinese international projects, among which, confidentiality.   It is a totally different working environment. The confidentiality of the bilateral agreements concluded with the Chinese is actually the reason for which misinterpretations, misjudgements, and speculations spread around. As some details do not come into the open, many people feel uncertainty.

This is also the case with Pelješac bridge at the moment. Some ingredients of the project, such as the number of workers, and whether they would be all Chinese or not, have not been made public yet.

On 10 April, during his visit to the construction site, the Croatian Prime Minister Andrej Plenkovic said: “This is the project of great importance for Croatia and it creates a new dimension of cooperation with China. At the same time, a fact that the project is funded from the EU budget with 357 million euros (410 million U.S. dollars) shows how important the EU cohesion policy and the EU’s help for the project are”.

Moreover, Croatia must be really happy to have overcome certain obstacles that were looming one year ago – the complaint from Strabag and Bosnia’s opposition.

In April 2018, Strabag went to the administrative court in Zagreb to stop the project, claiming that it was awarded to the Chinese company because the price was too low.

Three teams had submitted their bids for the bridge. The Chinese consortium, made up of China Road and Bridge, CCCC Highway Consultants and CCCC Second Harbour Engineering, bid 2.6bn kuna (€350m) with the offer to build the structure and the corresponding roads in 36 months. The Chinese bid was below Strabag’s bid of 3.28bn kuna (€440m), and the bid of 3.19bn kuna (€430m) of the joint venture between the Italian Astaldi and the Turkish IC Ictas. After the project was awarded to China Road and Bridge in January 2018, both Strabag and Astaldi submitted a complaint to the State Commission for Control of Public Procurement Procedures claiming that the price offered by China Road and Bridge, was “unusually cheap”, which, according to them, it could only possible because the Chinese received state aid.

The state commission rejected the appeal.

Hu Zhaoming, the Chinese ambassador to Croatia, told the Xinhua agency in March 2018 that the appeals against Chinese consortium were “groundless” given that the Croatia had estimated the cost of the project to be 1.8bn kuna: “I believe that the price by the Croatian side was endorsed by relevant agencies, including the European ones,” he said. “If 2.08bn kuna is a dumping price, what about 1.8 billion kuna?”

Although he had withdrawn from talks with the Chinese about Rijeka port back in 2009, thinking that the EU would help Croatia  in developing this port, Ivo Josipovic, a former president of Croatia, said this time that China’s offer to build the bridge would benefit Croatia: “I hope that the deal with the Peljesac Bridge will not be an exception in bilateral relations, but the beginning of much more intense economic, cultural and other relationships,” he said. “From China, a state like Croatia can learn a lot.”

In September 2018, Bosnia’s parliament adopted a declaration against the construction of Peljesac bridge and sent a letter to the European parliament, asking to stop the construction of the bridge. In November, the main committee of the Bosnian ruling Party of Democratic Action (SDA) adopted a resolution asking Croatia to stop the planned construction of the Pelješac bridge until an international border is established and complaining that the bridge would prevent big ships to cross the waters towards Bosnia.

Consequently, Pelješac bridge is an even greater success for China as it has won a project on European ground under difficult circumstances. It proves that China complies with the transparency rules requested by the European Union in tenders and China has the technical and managerial capabilities to win such huge projects.

During the 16+1 summit in Croatia, the Chinese prime-minister, Li Keqiang, said that the Peljesac Bridge project is a model of tripartite cooperation among China, Croatia, and the EU, and realizes mutual benefits and win-win results. He also emphasized the importance of the 16+1 cooperation in enhancing the cooperation between China and the 16 Central and Eastern European Countries that develops China’s European integration.

From now on, China will become eligible any time in open tenders for infrastructure cooperation with any European Union member states and will abide by the EU standards and rules.

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