[PR] “Quick” and “cheap” loans for the implementation of costly and aggravated investment projects

Entering into direct deals on infrastructure projects without public tendering increases the risk of corruption. This could be observed in the agreement concluded by the Macedonian government at the time with the Chinese company “Sinohydro” on the construction of the Miladinovci-Shtip and Kichevo-Ohrid highways, analyzes the Institute for Democracy in the research paper . “Pushed into a dead end: the illusory belief in the Chinese capital corrosive for the construction of the North Macedonian highways”. Nonetheless, despite this risk, these seemingly cheap and quick loans are attractive to politicians in the Western Balkans.

Today, the cost amounts to more than 10 million euros per kilometer of motorway, according to existing projections; an amount that could increase further. This is what the Kichevo-Ohrid highway will cost citizens; a project which, in addition to being 3 years late, has come to cost almost double the price initially planned, while the legal proceedings launched for abuse of power and corruption darken it.

The wiretaps published in 2015 by the opposition at the time revealed the existence of suspicions of corruption and abuse of power, as a result of which an indictment was drawn up. The Special Prosecutor’s Office opened a case titled “Trajectory” against four officials, senior government officials and reported that there were grounds to suspect that the budget damage amounted to EUR 155,117,172.00 . No court decision has yet been issued in the court case.

Construction of the highway began on February 22, 2014. For the purposes of this capital investment, a loan has been taken out from the Exim Bank of China and the country is expected to return it within 20 years. In October 2013, the Parliament approved the loan and in November of the same year the agreement was signed between the government of the Republic of North Macedonia and the Chinese company.

The government of the day promised that the new highway would be operational in 4 years, in 2018, but in 2020, the highway is barely halfway. The Chinese entrepreneur “Sinohydro” now has a new deadline until June 30, 2021 to complete the construction of the highway. The first kilometers of motorway between Vrbjani and Ohrid have been announced open to traffic this year.

The initial project underwent a change as a result of alignment errors of the planned and built platform. Construction activities have been stopped and the price is being paid by the citizens. The authorities indicate that the total project execution rate is now slightly above 50%.

Initially, it was announced that the 57 km long highway would cost 374 million euros. Today, the price with the additional amendments to the initial agreement has already reached nearly 600 million euros.

You can read the analysis “Hustled into a dead end: The Delusional Belief In Chinese Corrosive Capital for the Construction of North Macedonia’s Highways” here.

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