Chamber of Construction Industry of Serbia requires 50% of works on building infrastructure to belong to domestic companies

Foreign companies shouldn’t get jobs of building infrastructure in Serbia through political agreements and without tendering procedures, says the vice president of the Chamber of Construction Industry of Serbia, Goran Rodic, and adds that it will completely destroy the domestic construction sector.

– Domestic construction companies want 50% of the works on building the infrastructure to belong to them and to secure their participation in tendering procedures.

On the occasion of public discussions about the construction of the Morava Corridor from Pojate to Preljina, of the length of 110 kilometers, which is supposed to be carried out by the American company Bechtel, he told Beta that the practice of bringing foreign companies had been introduced in 2000.

The Memorandum of Understanding and Cooperation was signed with Bechtel in October 2018, and the maximum value of the investment, as announced, is EUR 800 million.

When asked why these arrangements were made without tendering procedures, Serbian Minister of Construction, Transport and Infrastructure Zorana Mihajlovic said that Serbia had strategic agreements with several countries, based on which many roads and railways had been built.

Rodic said that, even when tendering procedures are organized, the terms are impossible for domestic companies to meet, primarily those requiring income numbering in millions.

– Bechtel is not the contractor, but a consultancy, which will hire a foreign company for this job, and this company will, in turn, hire a domestic one. The construction of infrastructure therefore costs a lot, and domestic companies get very little – Rodic said.

He added that foreign companies didn’t even want to begin building before adding 25% to 30% to the realistic price.

He claims that the domestic construction industry started deteriorating in 2000, when the state started hiring foreign companies.

– As main contractors, those companies keep their license, while hiring domestic companies to do the work, paying local workers EUR 2.5 and foreign workers EUR 24 to EUR 28 – Rodic said.

He pointed out that foreign companies also hire domestic institutes to prepare projects, while still entrusting supervision with foreign companies. As subcontractors, domestic companies can’t, as he said, get licenses for main contractors, which prevents them from securing requirements for working abroad.

Zlatko Minic, a representative of the NGO Transparentnost Srbija, said, as Istinomer reported, that, by giving the answer she gave, Mihajlovic had practically admitted that the decision to sign the memorandum with Bechtel was a political decision.

– I hope that the estimated value will not be the value of the signed agreement – Minic said.

He added that “the problem is that, once again, valuable arrangements are agreed without tendering procedures, which has become the usual practice when it comes to big projects”. Minic said that the way these big jobs were done, such as Belgrade Waterfront, South Stream, or the arrangements with Chinese companies, was condemnable and that certain contractors were obviously favored.

– The minister must explain the economic benefits of this memorandum or at least prove that the state is not being damaged – Minic said.

Ministarstvo građevinarstva, saobraćaja i infrastrukture Republike Srbije

Građevinska industrijska komora Srbije

Transparentnost Srbija Beograd

Bechtel Corporation San Francisco

BECHTEL LIMITED OGRANAK BEOGRAD

Goran Rodić

Zorana Mihajlović

Zlatko Minić

construction of infrastructure in Serbia

domestic construction sector

domestic construction companies

Morava Corridor

Memorandum of Understanding and Cooperation with Bechtel

construction of section from Pojate to Preljina

strategic contracts

tenders for construction

consulting company

main contractors

license for main contractors

public tenders

Belgrade Waterfront

South Stream