Bratislava Bypass, flagship EFSI failure: non-transparent decisions for dubious public benefit – New report

 

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A EUR 1.76 billion-worth project guaranteed through the European Fund for Strategic Investments (EFSI)i, the Bratislava Bypass is a public-private partnership (PPP) supported by the Slovak government and promoted as the biggest EFSI project in Central Eastern Europe.

Yet, preferred by the government to greener and more effective solutions to the traffic problems of the city, the Bypass is nothing like the successful model for EFSI-backed PPPs it was advertised to beii. The much sought-for unlocking of secure income for private companies is achieved at the expense of taxpayers. Indeed, citizens will have to carry the burden of the government’s debt for the next 30 years to come – claims a new NGO report.

Through an analysis of two procurement processes and other dodgy practices adopted during the project development, Bankwatch and Counter Balance trace the murky story of the acclaimed motorway. The report highlights how on multiple occasions, the legal procedures for the development of the project were just formally respected, leaving ground for a chain of biased decisions and conflicts of interest.

First of all, the report exposes the Slovak government‘s biased choice of the PPP financing scheme, since the early stages of the project. For instance, the PPP option assessment was already announced in 2013iii before an evaluation of the different alternatives had been carried out.

Then, while the lawfulness of the procurement process was officially criticised by a report of the Supreme Audit Office of the Slovak Republic (SAO)iv and a warning mentioned by the Ministry of Financev, the PPP implementation went through undisturbed.

The report points out that, as warned by the Financial Policy Institute of the Slovak Ministry of Finance, the State did not truly verify whether other cheaper options or other type of infrastructure could more efficiently address the transport needs in Bratislava. Indeed, it only compared the motorway against the so called „zero option“ – the scenario in which the project would not be implemented at all.vi vii

In parallel, some of the main assumptions on which the feasibility study was based appear to be controversial manipulatedviii. For example, by significantly overestimating the increase of traffic and not taking sufficiently into account data from comprehensive public traffic surveys, the feasibility study led to the misleading conclusion that the Bypass is the best option for Bratislava’s traffic.

Juraj Melichar from CEE Bankwatch Network – author of the report: “According to detailed studies the PPP motorway solution is not only unreasonably overpriced, and thus unfavourable for taxpayers, but also inappropriate to solve the city’s main traffic problems. The Bypass will indeed just divert 9% of the city’s traffic, leaving the much more urgent issue of commuters travelling from the outskirts of Bratislava to the city centre unaddressed.ix

An assessment of more efficient and sustainable options revealed that the consolidation of the city’s public transport network might have saved the government hundreds million euros, while providing more effective and low-carbon solutions.

Last, this worrisome picture is complemented by the low levels of transparency and public participation around the project so far. In Autumn 2016 the Slovak National Criminal Agency started an investigation following a suspicious management of the EUR 350 million-worth land purchase for the project.

Xavier Sol, Director of Counter Balance: „This project is far from the kind of innovative project one could expect being financed under the Investment Plan for Europe. Instead, it is a carbon-intensive project fraught with conflicts of interests and a lack of transparency. Therefore, we call on the European Commission and the EIB to withdraw from the project financing.

Download the report here.

For more information:

Juraj Melichar
CEE Bankwatch Network/Friends of the Earth-CEPA
E: juraj.melichar@bankwatch.org

Roman Havlíček
Green Coalition
E: havlicekroman@yahoo.com

Xavier Sol
Counter Balance
E: xavier.sol@counter-balance.org

 

Note to the editors:

i https://dennikn.sk/464272/co-sa-naucili-pri-bratislavskom-obchvate-najvacsej-vladnej-zakazke-historii/#lock

ii https://www.euractiv.com/section/euro-finance/interview/efsi-boss-the-next-eu-budget-will-be-different/

iii http://spravy.pravda.sk/ekonomika/clanok/291979-obchvat-bratislavy-a-cestu-do-luznej-planuju-ako-sukromne-cesty/

iv SAO is an independent external audit body. It audits how taxes and other sources of revenue such as customs duties and fines are calculated and collected and how the expenditure of public funds is managed. The SAO performs the audit in term of legal public statutes observance, economic, efficiency and docility. https://www.nku.gov.sk/web/sao/about-us

v Protokol o výsledku kontroly: Kontrola správnosti zostavenia záverečných účtov a hospodárenia vo vybraných kapitolách za rok 2015. Bratislava, 2016.

vi http://www.ineko.sk/clanky/co-by-malo-ministerstvo-dopravy-zohladnit-pri-rozhodovani-o-projekte-ppp-d4-r7

vii http://www.etrend.sk/ekonomika/martin-filko-sme-ochotni-riskovat-nase-kariery.html

viii PPP obchvat Bratislavy môže byť predražený až o miliardu eur [online]. In: KOVALČÍK, Ján a Marián JÁNOŠ. Bratislava: INEKO, 2015, 48 p. [cit. 2016-09-12]. Online: http://www.ineko.sk/file_download/900/Anal%C3%BDza+-+PPP+obchvat+Bratislavy+m%C3%B4%C5%BEe+by%C5%A5+predra%C5%BEen%C3%BD+a%C5%BE+o+miliardu+eur.pdf

ix http://obchvatslovenska.sk/

 

 

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