Despite prior warnings against the abnormally low price offer, Poland decided to go for the lowest price. The contractor was eventually sent packing.
“By disregarding mandatory minimum wages, health, safety and quality aspects, the Polish authorities have gambled and lost”, said construction academic Prof John Smallwood.
Prof Smallwood, construction science researcher and lecturer at the Nelson Mandela Metro University (NMMU), wrote to state and construction authorities around the world to warn them against sacrifice of construction sheq performance by some Chinese contractors.
“At this state there are only losers; the highway will cost much more than initially foreseen, work will not be finalised on time for the 2012 Euro Football Championship, and Chinese workers imported when European workers backed out, will be sent back to China losing their employment opportunities in Poland.”
Poland is to co-host the European Football Championship in 2012 with Ukraine. To connect several cities, Poland needs to build additional highways.
For the construction of a stretch of the A2 highway between the Polish and German capitals, Warsaw and Berlin, a Chinese state owned company Covec tendered. “To everybody’s astonishment the Chinese company offered a price 30% lower than the offers of Polish or European companies.
“Despite strong scepticism of many, the Chinese bid was accepted by the Polish authorities. From the beginning of construction, critical problems emerged on road building sites.
“Covec tried to transfer its low offer to local subcontractors. Many subcontractors refused to work for Covec, because they could not fulfil legal obligations on budget.”
Chinese ‘social dumping’
After serious delays, the Chinese company asked Polish authorities to issue a residence and employment permit for 800 Chinese workers. After three months, the Polish authorities realised that the highway would not be finalised before the deadline and the contract with Covec was terminated.
Importation of Chinese workers is interpreted as ‘social dumping’ or occupational cultural transfer by China.
Poland is claiming a penalty of 186 million Euro, and Covec refuses to pay penalties.
The EU is discussing facilitation of access of non-EU companies to the European labour market. “Without serious preventive controls and adequate sanctions, we will see more cases like Covec in Europe”, Prof Smallwood warned.
PHOTO; Prof Smallwood, construction science researcher and lecturer at the Nelson Mandela Metro University (NMMU), wrote to state and construction authorities around the world to warn them against sacrifice of construction sheq performance by some Chinese contractors.