Exclusive: EU investigating Poland over road-building pile-up

Wed Dec 19, 2012 9:56am EST
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By Adrian Krajewski and Christian Lowe

WARSAW (Reuters) - The European Commission is investigating why Poland's government is refusing to pay dozens of foreign contractors for work carried out under a road-building program worth billions of euros and backed by Europe.

Should the investigation find Poland's state institutions have been at fault, it will deal a severe blow to the reputation of a country which routinely is held up in Brussels as a model of the successful use of European Union (EU) development cash.

EU officials are looking into how Poland's state highways agency managed a multi-year program, worth a predicted 5.5 billion euros ($7.27 billion) this year alone, to modernize the creaking road system Poland was left with after decades of Communist rule.

The scheme - one of the biggest publicly-funded infra-structure projects in Europe - has more than doubled the size of Poland's high-speed road network in four years. But it also has left dozens of contractors alleging that the highways agency, GDDKiA, owes them billions of euros in unpaid bills.

The agency says it has complied with the law and where disputes arose it was mainly because contractors' work was not up the required quality.

The risk for Poland is that if the commission backs the contractors' complaints, it could jeopardize Poland's ability to access funds from the EU's next round of development funds, cash on which its economy depends for growth.

"This issue of management of road-construction contracts by GDDKiA has been brought to our attention at the Commission. Our services - in charge of regional policy - have asked the Polish authorities to provide more information," said Shirin Wheeler, commission spokeswoman on regional policy.

"We have also asked the Polish audit authority (within the Finance Ministry) to carry out an audit of the specific contracts which are affected. We expect the results in the first few months of next year," she said.   Continued...