Case Studies: Belgrade By-pass Project Section A: Batajnica-Dobanovci, Serbia

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Project Overview
Batajnica1.png
Figure 1: Belgrade By-pass Project, Serbia
Belgrade By-pass Project, Section A: Batajnica-Dobanovci, Serbia
Project Type: Greenfield
Type of Project Financing: Public
Budget: 67,8 EUR million
Project Time Line
Project conceived:

1972

Lot A1
Tender for the prequalification: December 2007
Invitation for prequalified bidders in restrictive procedure: June 2010
Contract signed:

November 4, 2010

Lot A2
Tender for the prequalification: December 2007
Invitation for prequalified bidders in restrictive procedure: May 2010
Contract signed:

September 21, 2010



Start of construction: October 2010
Completion of work: October 2012




Introduction

The Belgrade By-pass is part of the Pan European corridor X. The road allows traffic to and from the city of Belgrade to by-pass the city. More specifically, in the north (traffic to and from the Hungarian border and the city of Novi Sad), highway E-75 is redirected to by-pass the city. In the east (traffic to and from Croatia) highway E-70 continues to the south over the Sava river and connects to E-75 on the southern city border at Bubanj Potok. The latter section is planned to cross Danube, and lead to Starcevo. The highway consists of two carriageways, 11.5 m wide each with a median of 4.0 m. Two major intersections allow connections with the existing road infrastructure.

The initial idea of the Belgrade By-pass dates back to 1972 when it was included in the General Urban Development Plan of the city of Belgrade. Since then, there were few modifications until the late 80s when the European Investment Bank (EIB) agreed to provide loans for construction. This fact accelerated the project’s designs which were prepared in parts corresponding to three sections:

  • Section A: This is the alignment from Batajnica to Dobanovci of total length 9.7km;
  • Section B: This is the alignment from Dobanovci to Bubanj Potok of total length 37.3km; and
  • Section C: This is the alignment from BubanjPotok to Starcevo, of total length 22km.

Section A consists of two lots:

  • Lot A1 (northern 3.7km) - interchange Batajnica;
  • Lot A2 (southern 6.0km) - highway E-75 and interchange Dobanovci.

Construction of section B started in 1991. However, soon after, the loan was cancelled.

The first phase (one carriageway), concerning the northern part of section B and the bridge over the river Sava was constructed using public funds and opened to traffic in 1999. The same year (1999), the bridge was damaged and the whole section was closed to traffic. Repair and reconstruction of the bridge allowed section B to open to traffic in 2005.

The Public Enterprise (PE) “Roads of Serbia” is responsible for the entire project. In 2005, the technical terms of reference for the construction of section A were completed based on conceptual design level. As, the completed detailed design for section B required revisions to comply with new developments, and section C was completed at the general level, the feasibility study gave priority to section A for delivery and construction.

The European Investment Bank (EIB) and the European Bank for Regional Development (EBRD), provided loans for the design and construction of Lot A1 and Lot A2, respectively. The General Procurement Notice was first published in 2006 by both banks and the PE “Roads of Serbia”. The next notice was published in November 2007 as an update to the General Procurement Notice, followed by the Tender for Prequalification in December 2007, which was published by the PE “Roads of Serbia”.

The invitation for prequalified bidders for the restrictive procedure was published in May 2010 for Lot A1 and June 2010 for Lot A2. Lot A2 was opened to traffic in May 2012, while Lot A1 is still under construction (2015).

The Contracting Authority (Public Party)

The PE Roads of Serbia is responsible for the operation and maintenance of the Serbian road network. Investments in new infrastructure are currently under the jurisdiction of Corridors of Serbia Ltd.. Following construction, the infrastructure asset will be transferred to PE Roads of Serbia governance.

Sources of Financing

The project was delivered through public finds and loans provided by the European Investment Bank (EIB) and the European Bank for Regional Development (EBRD), for the design and construction of Lot A1 and LOT A2, respectively.

Users

Project users are individual (national and international) users and the local industry, which extensively employs road freight transport through transport companies.

Key Purpose for Public Financing Model Selection

The European Investment Bank (EIB) provided a loan for the construction of the section B in the 1990s, which was canceled in 1999. PE Roads of Serbia started the new round of negotiation with the European Investment Bank (EIB) and the European Bank for Regional Development (EBRD) for new loans in early 2000s.

The Belgrade By-pass has an alternative route - the existing highway E-75- which goes through the city. The feasibility study showed that the demand elasticity on sections A and B is high. In other words, traffic is very sensitive to price and cost changes. Therefore, while the potential of introducing tolls on the Belgrade by-pass was preliminary considered, tolls were finally not applied. The option remains to be re-considered at a later date.

Project Timing

There are improving economic conditions since the contract award. The per capita GDP of the region at the time of data collection of the project (2015) with respect to GDP at project award is higher than expected.

Project Locality and Market Geography

The project entails the by-pass along the Belgrade city borders, starting from the northern border towards the west and the south – outer urban.

Procurement & Contractual Structure

PE Roads of Serbia secured a loan from the EIB and the EBRD for Design and construction of section A.

Tendering

Following an invitation to pre-qualification, ten (10) applicants were pre-qualified to tender for a Design & Build Contract. Bids were received from six (6) pre-qualified bidders for lot A1 and eight (8) pre-qualified bidders for lot A2.

Contract Structure

Documentation for the section A was completed at the conceptual design level. It was decided to proceed with the Plant and Design-Build Contract (1999 FIDIC Yellow Book).

Risk Allocation

The contract was prepared according to the Plant and Design-Build Contract (1999 FIDIC Yellow Book), which already has defined risk allocation, as shown in Figure 2.

Batajnica2.png
Figure 2: Risk allocation

Performance

The construction contract included standard performance indicators for budget, time and quality performance.

Project Outcomes

Lot A2 was delivered on time and within the budget. Lot A1 faced delays and problems with land acquisition that have led to the perception of low project success.

References

  • The initial version of this wiki page has been produced within the framework of the BENEFIT project that has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No 635973