Macedonia Rethinks Highway Construction Plan

Skopje ring road | Photo by: build.mk

The Transport Ministry has said that parts of the east-west route stretching from Bulgaria to Albania, which forms part of the European Corridor 8, will be financed through loans raised by the government.

“One thing is clear, we will have to build parts of the highway on our own by raising loans,” Transport Minister Mile Janakieski said this week.

The announcement came after the tender for the project ended in fiasco last October, without a single bid arriving at the address of the Transport Ministry following four years of preparation.

The government in Skopje had hoped that a private company would take on the project in exchange for the right to collect tolls on the finished highway.

Previously the centre-right government of VMRO DPMNE believed that concessions were the most cost-effective way to finance the new roads, instead of seeking loans.

Janakieski explained this week, however, that “significantly fewer stretches will be offered for concession in the future”, arguing that the the roads that were initially offered were simply not attractive due to the low traffic expectations.

He was unable to provide details about how much money the government would need in order to begin construction on the east-west route.

Previous estimates showed that the entire Macedonian section of Corridor 8 may cost as much as €1 billion.

Macedonia has yet to complete major parts of the highway. Only the section of Corridor 8 around Skopje and another linking the capital to the western towns of Tetovo and Gostivar are finished and functioning as highways.

The country offered its roads up for concession in August 2008 and by November 2010, five international consortia pre-qualified for the bidding. However, after many postponements, no one submitted a bid.

Not even Macedonia’s busiest route, the almost completed north-south highway running from Serbia to Greece, which forms part of European Corridor 10, was attractive enough for concession.
 
The government last year signed a loan agreement with the European Bank for Reconstruction and Development and the European Investment Bank for the financing of the last 28 kilometer stretch of Corridor 10 from Demir Kapija to Smokvica. The works there, estimated to cost over €200 million, are set to begin this year.