Reuters: Bankruptcy News: Polish roads operator sued for $385mln by Irish builder

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Polish roads operator sued for $385mln by Irish builder Oct 8th 2012, 14:55 Mon Oct 8, 2012 10:55am EDT * SRB seeks PLN 190 mln in penalties, 1 bln in damages * Says walked out on deals on Polish key highway * Blames state road operator GDDKiA * GDDKiA blames SRB for overdue contractor payments WARSAW, Oct 8 (Reuters) - Poland's state road operator has been hit with a 1.2 billion zloty ($385 million) compensation claim by Irish builder SRB Civil Engineering, the latest fallout from a troubled construction spree ahead of the Euro 2012 soccer tournament. SRB said it was forced to walk away from a contract to build stretches of a key Polish highway because of failures by roads operator GDDKiA and wants to be compensated for losses it said it incurred. But GDDKiA said it was the contractor who was at fault and that it had to withdraw from the contract, not the other way round. Poland's 94-billion zloty infrastructure programme was designed to showcase the country's emergence as a modern, dynamic country in time for the Euro 2012 tournament, which it co-hosted with Ukraine. But the projects have left behind a trail of contractual disputes and construction firms saying they had lost money. SRB was responsible for building 94 kilometres of a 5.8 billion zloty A1 highway from the northern city of Torun to Strykow in central Poland. It won the contract as part of a consortium with Poland's PBG, which since June has been in bankruptcy protection. The Irish builder said it finished a 30-km stretch of road ahead of schedule but had walked out on the rest, blaming GDDKiA's administration problems and lack of knowhow. It said it was seeking 190 million zlotys in penalties and 1 billion in damages. SRB also said it had requested the European Commission to review of the roads programme, arguing its problems mirrored those of a number of construction groups and putting the blame on GDDKiA. "The GDDKiA had neither the experience to manage such a large roads programme nor a suitably resourced supply chain to deliver it," the Irish company said. In response, GDDKiA said SRB owed 51 million zlotys in overdue payments to sub-contractors and spokeswoman Urszula Nelken said: "We withdrew from the contract due to the contractor's fault. "The consortium was not managing the A1 stretches, as it was simply unable to even though we gave them time to deal with banks and sort things out inside the consortium." In another sign of the mess left behind by the road-building programme, a second big Polish builder, Polimex, is fighting for survival having like other firms agreed to razor-thin margins on its contracts and then found costs shooting up. Link this Share this Digg this Email Reprints

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