AUSTRIAN company Strabag says it may take international court action if it is not given additional funding to complete construction of the new passenger terminal at Sofia Airport.
This was reported on May 16 by Bulgarian-language newspaper Pari, which quoted the company's legal representative in Bulgaria, Todor Batkov.
Strabag had sufficiently strong grounds to sue in the Paris court of arbitration, Batkov said.
The prices of steel and fuels used in the construction process had doubled since the project was launched and this had raised Strabag's costs considerably. At the same time, the start of construction was delayed for eight months, and this had not been Strabag's fault, Batkov said. In the meantime, the company had to spend additional resources to pay its team.
According to the contract Strabag has with the Transport Ministry, these costs should not be paid by the company. Strabag had shown that it honoured its commitments and would complete the project according to schedule - by the end of August 2005, Batkov said.
Last summer, Strabag demanded an additional six million euro for the project to cover its extra costs for steel and other building materials. Since no agreement had been reached, the company decided to seek redress in court, Batkov said.
On April 27, the Finance Ministry said that completion of the project might be delayed to spring 2006. The reason given for the delay was that the Transport Ministry was about to launch new tenders for the refurbishment of the airport terminal. According to the Transport Ministry, Strabag had proposed "unknown and unreliable" companies to provide the equipment for the terminal - transport lines for luggage, X-rays for luggage and passengers, check-in systems and others.
The project's total budget is 119.6 million euro, including ISPA financing of more than 44 269 390 euro. The European Investment Bank (EIB) has provided financing of about 53 million euro. The state is to provide financing of more than 22 million euro.
Strabag's providers of airport equipment were chosen in 2001 and at the time, the offers were not subject to revision. However, they may now be revised, because of strict rules imposed by the funding institution, the EIB.
Strabag, as well as all other candidates to win the tender for the new terminal construction in 2001, had to specify, prior to the tender, who would be delivering the systems for the airport's refurbishment. The suppliers, on the other hand, had to present certificates that their equipment corresponded to EU flight safety requirements. Only after this documentation was presented, the EIB approved the choice of Strabag as contractor.
Meanwhile, because of the September 11 attacks on the US, global safety rules for civil aviation became stricter. In 2003, the European Commission approved a new directive requiring additional, stricter, measures that will become mandatory for every country after 2006.
These changes mean that the offers submitted in 2001 no longer meet requirements.
Meanwhile, Bulgarian-language media reports said that another possible reason for the delay was a reported dispute between Dutch consulting firm NACO and Strabag about the quality of the tarmac of the runways at Sofia Airport.
The Transport Ministry wants all tarmac replaced, while Strabag wants to replace only the destroyed parts.
The defects were found back in July 2004. NACO said that an inspection had found that the deviation from the required tarmac specifications was about 40 per cent.
Earlier this month, the Transport Ministry said it had appointed a new executive director at Sofia Airport after the contract of the previous incumbent, Stoil Pashkunov, expired. Pashkunov was released and Kalin Barzov, former head of the state's Civil Aviation Administration, was appointed.
Despite denials by ministry officials, some observers believe that Pashkunov was let go because of the delays in the airport project.