Sehovic: More than 60 domestic companies engaged in highway construction

#DamirŠehović #Highway #DomesticCompanies #ChinaRoadAndBridgeCorporationCrbc #Investments

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The main contractor on the highway priority section Smokovac – Matesevo, the Chinese company the China Road and Bridge Corporation (CRBC), has signed 61 subcontracts with 61 domestic construction companies worth €210m, said MP for the Social Democrats Damir Sehovic.

Sehovic said that currently 550 workers were engaged and that about 3,500 people would be working on the construction during the period when the most intensive work would be carried out and that at least one-third of these would be from Montenegro.

This will be a great benefit that the people will feel during the construction of the highway. The benefits of the very highway would be several times higher

Sehovic said three studies had been done and all three had shown that the project was financially viable and that the total benefit to be derived from the highway was €318m greater than the investment.

He said that such a large project incurred an increase in the public debt, but he pointed out that investing in infrastructure was a textbook example of boosting economic development and that the debt, under these circumstances, was justified.

“Our public debt will rise until 2018, after which it will start to fall. It will be at a higher level than defined by Maastricht Treaty, but the average level of public debt among EU member states is 90% of GDP”, Sehovic said.

He added that he was glad that the state finally gave up the neo-liberal ideology, which stipulated avoiding public debt as one of the instruments of economic policy.

“The issue of a currency risk has been pointlessly presented to the public as a problem, although the state is protected from the currency risks during the grace period, ie by 2021”, the MP said.

“The fact that the dollar has grown stronger against the euro in no way affects Montenegro since construction expenses have been fixed,” Sehovic said. “It is the contractor that has lost since the fixed currency rate is based on the $188m disbursed so far…based on that he’s already lost some $30m”, Sehovic said, adding that Montenegro has five years to think about how to cope with the currency risk. “One of the most common ways is employing a protection strategy, such as hedging”.

Sehovic also said that the construction of the priority highway section had to be finished by 11 May 2019 and that two most demanding structures on the section were the Moracica bridge and the Vjeternik tunnel.

He said he was convicted the project would be finished within the deadline.

Source: Cafe Del Montenegro