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(AFP) – 1 day ago|
WARSAW — The first Chinese firm to win a major public works deal in the European Union plans to drop the contract to build part of a Polish highway over funding disputes, Poland said on Friday.
"COVEC told us in a letter that they intend to withdraw," said Andrzej Maciejewski, a senior official at Polish highways directorate (GDDKiA).
Construction work on the A2 highway linking Warsaw and Berlin stopped last month after China's COVEC failed to pay Polish subcontractors.
In September 2009, COVEC -- the China Overseas Engineering Group Company -- beat several European competitors in the race to build a 49-kilometre section (30 miles) of the A2 motorway.
On Thursday, GDDKiA set a 7-day deadline for COVEC to solve its financing difficulties. While the company threatened to tear-up the contract in response, it also offered to sort out the differences.
"The group also asked to meet us to discuss the possibility of continuing the project," said Maciejewski. "If nothing is resolved we will have to drop the contract because it can't go on like this," he added.
The highway authority also claimed that Poland could demand 741 million zloty (187 million euros, $271 million) in damages from COVEC should the contract be cancelled.
On Thursday, Prime Minister Donald Tusk, threatening to drop COVEC, said that Poland had taken a "certain risk" cooperating with a new partner, "a Chinese one," on the Polish and European market.
COVEC's bid of 1.3 billion zloty (330 million euros, $472 million) for the contract was half the estimated tender amount.
The highway is part of Poland's efforts to upgrade its infrastructure in time to co-host the 2012 European football championships in parnership with neighbouring Ukraine.