Chinese companies' interest in infrastructure projects is growing

(Patria) - Chinese companies are showing increasing interest in infrastructure projects in BiH, as well as in the region. However, it is worrying that these are companies from the World Bank's blacklist, as well as the African Development Bank. These lists mainly include companies due to corruption. In our country, this is evidently, we hope - currently, not a problem. The Chinese are already building in Herzegovina. But where does the Chinese path of investment lead, writes Federalna.

A consortium comprising three companies, one from Azerbaijan and two from China, are the contractors for LOT 2 - the Počitelj bridge. Among them is a Chinese company - Sinohydro Corporation Limited. Numerous world media outlets have written about this corporation and its allegedly dubious dealings, fraud, and corruption in many countries around the world. It was even on the African Development Bank's blacklist due to suspicious dealings in Uganda. This was determined by the local anti-corruption office. From Uganda to BiH, the Chinese are slowly but surely conquering the BiH market.

"Numerous reports, indicators, and warnings from the European Union and the USA show that Chinese companies and certain Chinese groups generally prefer to operate, let's say, in countries with a high degree of corruption, authoritarian regimes, less democratic regimes, and why - because they complete some jobs faster and do not seek reform of these systems," says economic analyst Admir Čavalić.

Sino Corporation has also submitted a bid for the construction of the Kvanj tunnel - Buna sub-section. The Chinese are particularly interested in this section. Out of nine bids received, as many as five are from China. All companies are state-owned, and some of them have a questionable business history. For example, China Road and Bridge Corporation - China & CCCC Second Highway Engineering Co. Ltd. - China was on the World Bank's blacklist in the past due to "false" road construction practices in the Philippines. In response to our inquiry about whether they have any information about Chinese companies on the blacklist, Autoceste Federacije stated that each procurement procedure is carried out in accordance with the rules and procedures of the financier: "Each financier, and in this case the European Investment Bank, which is financing the Kvanj-Buna tunnel project, has clearly defined rules and regulations for checking the eligibility of companies that have applied to participate, or to whom contracts are awarded. Therefore, this involves checking companies from any country, not just Chinese companies. The evaluation report, which, among other things, includes checking the eligibility of companies, is subject to approval by the financier."

Generally, the most favorable bidder is the one who submits a technically satisfactory offer with the lowest price. Experts warn that with prices lower than usual, the Chinese are creating a monopoly in the market. And while foreign companies take the cream, domestic companies are left with only crumbs. And that's if the Chinese hire them.  

"I think we have excellent, fair companies, and in a way, it is much easier to control the efficiency and work in what they do and how they do it, than when it comes to companies that are several tens of thousands of kilometers away, so we practically have no security in the implementation of projects for which we have given them contracts and very often have already paid them," recalls economist Zoran Pavlović.

If it's any consolation, Chinese companies from the blacklist are also present in the region - in Montenegro, Serbia, and Croatia. However, as local media report, there have been significant problems in the implementation of certain projects. This is very important for this story. Nevertheless, Autoceste FBiH emphasizes that each contract clearly stipulates the rights and obligations of both contracting parties, as well as sanctions in case of non-compliance with the contract. The selection process for the best bidder is underway.