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The Bratislava Bypass

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The Bratislava Bypass THE BRATISLAVA BYPASS A PPP to get around traffic problems and debt statistics Meant to be a flagship for the But the Bratislava Bypass is rehabilitation of public-private problematic on various levels. From the partnership (PPP) motorway projects procurement process for the feasibility and their future expansion in Slovakia, study to the project development being the D4/R7 Bratislava bypass adds to carried out through opaque practices - the series of overpriced PPP motorway the project deserves a closer look. projects1 planned in recent years in the country. 1 Corruption allegations and conflict of interest Partly guaranteed by the European Fund for Strategic Investments (EFSI)2 While there have been other examples - the strategic investment initiative of projects developed without respect launched jointly by the European for legal requirements for transparency Investment Bank (EIB) Group and and fair competition in Slovakia, what the Juncker Commission to mobilise makes the D4 motorway singular is Contacts private financing across Europe - the that the PPP project was announced Bratislava Bypass features among the even before a full assessment of the Juraj Melichar 68% of EFSI‘s transport investment various options had been undertaken. CEE Bankwatch destined for carbon-intensive In addition, it was given the go-ahead Network/ 3 Friends of the Earth- projects . It is the largest EFSI project on the basis of manipulated data and 4 7,8,9 CEPA so far for central and eastern Europe . in a situation of conflict of interest. E: juraj.melichar@ bankwatch.org Preferred by the government to We have identified improper practices greener and more effective solutions in the joint procurement process on Roman Havlíček Green Coalition to the traffic problems of the city, the the feasibility study and the tendering 10 E: havlicekroman@ D4/R7 motorway is a concrete example documentation . Indeed, not only was yahoo.com of the conservative tendency of EFSI the procurement process carried out to still support carbon-intensive through unlawful practices formally Xavier Sol projects, rather than more sustainable criticised by the Supreme Audit Office Counter Balance 11 E: xavier.sol@counter- alternatives, as criticised by several of the Slovak Republic (SAO) , but 5,6 balance.org NGOs. on several occasions throughout the THE BRATISLAVA BYPASS: a PPP to get around traffic problems and debt statistics 1 project development more suspicious 5.35 million worth of work. This set-up practices of “legal corruption” can be jeopardises the reliability of the data on identified. Despite formally abiding by which the assessment of the PPP as the the law, the set conditions led to unfair best option was based17. In May 2016 and biased choices. this dubious procurement process was criticised by the Supreme Audit Office Firstly, the Ministry of Transport, of the Slovak Republic (SAO)18,19, who Construction and Regional submitted a draft of its audit report Development (the Ministry of findings to the Ministry of Transport in Transport) announced its intention to order to grant the possibility to raise implement the Bratislava Bypass with any objections to such accusations the PPP project option in 2011 and by the deadline of 19 May 2016. The 201312 before even having conducted Ministry of Transport then requested the feasibility study13. Then, in 2014 an extension of the deadline until 23 the Ministry of Transport appears May 2016. Coincidentally enough, the to have strongly “encouraged” the Slovak government officially signed the bidders for the procurement of the contract with the concessionaire Zero feasibility study to present the PPP Bypass Limited under a PPP scheme on option as the best suited for the project 20 May20, thus avoiding the publication by allocating EUR 0.75 million (as the of the SAO investigation results before maximum amount) for the study itself the agreement was signed. – and a package of EUR 5.35 million for a series of consultancy services, Besides the numerous problems mainly focused on the PPP scheme spotted in relation to the State’s development14,15, both commissioned choice of the PPP financing option to the same bidder16. What is more, for the project, several issues have the only alternative that the ‘overall been raised concerning the purchase project’ option is compared against in of land to build the motorway. The the study is the so called “zero option”, National Criminal Agency started an which is the scenario where the project investigation on this in autumn 2016.21 would not be implemented at all. 1. 2 Public spending for questionable Such premises obviously put the winner benefit of the procurement into a conflict of interest: it is hardly likely that any Even if labelled by the feasibility study consultant would find a PPP scheme as the best option, the PPP scheme for to be less suitable than the “zero the development of the project seems option” and thus forego a further EUR overpriced and very unfavourable 2 THE BRATISLAVA BYPASS: a PPP to get around traffic problems and debt statistics to the government – according to main transport problem is in its available information. The Slovak NGO public passenger transport; INEKO22 has analysed the background • It ignores multimodal transport data and calculated several options. approaches which focus on causes It concluded that other options might and possible improvements of the have saved taxpayers hundreds of critical points for traffic; millions of Euros.23 • The forecast in traffic demand in various areas has been significantly In parallel, there is a clear example of overestimated; how the legislative requirements for • The key inputs for the feasibility ensuring efficiency and sustainability study have been set largely in of public investments were only favour of the PPP alternative formally respected in the project • The EU technical assistance service development: the feasibility study24 JASPERS29 was not used, which met the requirements for assessing is very unusual for big EU funded alternative options only by assessing projects in Slovakia.30 the zero option (meaning the project not taking place) as opposed to the The Slovak Republic will reportedly so called overall option (all sections have to pay the concessionaire of the D4 and R7 combined). The the agreed amounts whether the Financial Policy Institute of the motorway is used intensively or Ministry of Finance warned25 the not.31 On the one hand such an Ministry of Transport that the State “availability fee” model mitigates had not verified whether there were the risks for the concessionaire of other cheaper or better alternatives depending on notoriously inaccurate (for the proposed project) as well as traffic projections for income, but it other type of projects altogether that also means that the concessionaire could differently address the transport carries hardly any risks at all after needs in Bratislava.26, 27 construction is complete. The map on page 11 shows that 59 per cent The main inadequacies of the PPP of all work places are situated in the project D4/R7 are28: central urban area, far from where the planned D4 bypass would be32. Thus, • Decisions made without taking into there is no evidence proving that the account relevant data on existing implementation of the project will help and expected traffic; solve one of the main transport issues • The D4 motorway primarily serves in Bratislava, namely the traffic caused transit traffic while Bratislava´s by commuters working in the central THE BRATISLAVA BYPASS: a PPP to get around traffic problems and debt statistics 3 area and living in the outskirts. It is description argued by different transport experts that, for such an amount of money, According to the European Commission, Bratislava could put in place other “the project is to construct 27 km of alternatives and get a new modern the D4 motorway and 32 km of the integrated transport system enabling R7 expressway around Bratislava”38, people to switch from cars to urban thus creating a 59km long Bratislava transport and contributing to the EU´s bypass. decarbonisation objectives.33,34,35,36 The D4 motorway is “part of the 1.3 Low levels of transparency and trans-European transport network public participation and will connect with the planned R7 expressway linking western and The level of transparency and public eastern Slovakia, and the existing participation has also been very D1 and D2 motorways”. The project low on almost all stages of project is supposed to “increase the development. The Ministry of Transport transport capacity of Bratislava and and National Motorway Company surrounding areas, strengthen local (NMC) for example refused to publish and international road connections, information on recent traffic data, the improve safety, cut journey times and models on which the project is based benefit the environment.”39 According and the names of the beneficiaries in to the public authorities, socio- contracts related to land purchase. economic benefits are expected to result from the improvement and the A website for the project was launched reliability of journey times. only after the process of public procurement of the concessionaire The D4/R7 Bratislava project will had started. INEKO repeatedly tried reportedly cost the Slovak Republic in to obtain information about the nominal payments approx. EUR 1.76 traffic forecast on which the D4/ billion in total, during the three decades R7 project has been based. What is of concession.40,41,42 Indeed, the PPP more, it remains unclear whether and will “include[s] the construction as at which stage the results of some well as 30 years of operation and public mobility surveys were actually maintenance of the D4 and R7.”43 taken into account in the Ministry of Transport’s assessment.37 2.1 A project heavily backed by public financial institutions 2 Bratislava bypass - project 4 THE BRATISLAVA BYPASS: a PPP to get around traffic problems and debt statistics The Bratislava bypass is a PPP under the terms of a design-build-finance- 2.2 Timeline of the project operate (DBFO) contract.
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