Case Studies: Motorway E-75, Section: Donji Neradovac – Srpska Kuca , Serbia

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Project Overview
Donji.png
Figure 1: Section Donji Neradovac – Srpska kuca, Serbia
Motorway E-75, section: Donji Neradovac – Srpska kuca, Serbia
Project Type: Brownfield
Type of Project Financing: Public
Contract duration: 540 days (18 months)
Budget: 21.847.838 Euro (2010)
Project Time Line
2009: Project Design
2010: Budget allocation
February 2011: Start of construction
July 19th, 2012: Planned completion date
November 14th, 2013: Section opens to traffic


Introduction

The former Trans European Corridor X connects Central and South-East Europe, with its main route Salzburg (Austria) – Ljubljana (Slovenia) – Zagreb (Croatia) – Belgrade (Serbia) – Niš (Serbia) – Skopje (FYR Macedonia) – Thessaloniki (Greece) (Figure 1).

The part of Corridor X that goes through Serbia consists of a motorway from the Croatian and Hungarian border to the city of Leskovac (Grabovnica), and a two-lane road from Leskovac to the border with the former Yugoslav Republic of Macedonia, which is currently under construction to be upgraded to full motorway.


The section is divided in six sub-sections:

1. Grabovnica - Grdelica (Gornje Polje) 2. Gornje Polje – Caričina Dolina 3. Caričina Dolina - Vladičin Han 4. Vladičin Han – Donji Neradovac 5. Donji Neradovac – Srpska kuća 6. Srpska kuća – Levosoje

Additionally, the sub-section Donji Neradovac – Srpska kuca, which is presented in this case study, has been completed and opened to traffic first.

The construction of this section was funded by the Republic of Serbia with the financial support of the Government of Greece within the framework of the Hellenic Plan for Economic Reconstruction of the Balkans (HiPERB).The contractor was the Greek company “Aktor”. The design consultant was the Institute of Transportation CIP, Serbia, and the Engineer was “Louis Berger”, France.

The works comprised of the construction of the highway, mainly along the existing main road M-1, including reconstruction and widening of the existing (left) carriageway for the emergency/stopping lane, and construction of a new carriageway on the right side with two traffic lanes and emergency lane, and central reserve, so that the total width was 27.4 m. Design speed was 120 km/h. The project also included the construction of grade-separated interchange and noise protection walls.

As part of the project, a non-commercial parallel alternative road R-214 of 8.2 km length was reconstructed, together with local access roads.

The section was opened to traffic on 14 November, 2013, although construction was not completed as anticipated. The scope of the project was reduced for the grade-separated interchange and asphalt works on the approximately last 500 m of the section (from the interchange to the end of the section) due to lack of financing.

The Contracting Authority (Public Party)

The project Donji Neradovac – Srpska kuca is nationally driven with absolute direct involvement of the public company Koridori Srbije Ltd.

The Koridori Srbije Ltd. was founded in 2009 by the Government of the Republic of Serbia, with the aim to act as funding authority in the construction of the highways, including in activities related to the expropriation, planning, design and supervision works. Therefore, the company was responsible for the construction and finalization of all sections of the former Corridor X, including the section Donji Neradovac – Srpska kuća.

Sources of Financing

The construction/reconstruction of the section Donji Neradovac – Srpska kuca was funded by the Republic of Serbia with the financial support of the Government of Greece through the Hellenic Plan for Economic Reconstruction of the Balkans (HiPERB).The Serbian government and the Ministry of Transportation were responsible for expropriation and design. HiPERB actually financed 16 million Euros (compared to the contracted 21 million Euros). Therefore, all the costs beyond 16 million Euros, including delivered works, claims, etc. are currently the responsibility of the Serbian government.

Users

The realization of this project will have an impact on both industrial and private users. Since this section is part of former Corridor X, which links Central and South-East Europe, it is planned to be used by international, regional and local users.

Key Purpose for Public Financing Model Selection

The project was financed as 100% Public. The main reason for selection of this type of financing was the fact that most of the funding for the project development was obtained through support from the HiPERB program.

Project Timing

The section is part of the former Trans-Yugoslavian highway, whose first section was opened to traffic in 1950, and was completed by the end of 1960s. Later on, during the late 1980s, a need for modernization of the main network arose, and several sections were reconstructed and upgraded into modern two-carriageway highway with 2+1 traffic lanes in each direction.

The section Donji Neradovac – Srpska kuca was initially constructed as a two-lane road in 1964 (according to the Serbian road data base). The first initiative for its reconstruction and upgrade was inspired by the 2004 Olympic Games, held in Athens, Greece. However, the Project was put on hold, and only the feasibility study was carried out in 2004. The Project started only after the Serbian Government announced in 2008 that the completion of the Corridor X was national priority no. 1 regarding construction works on the state road network (“National strategy of development of rail, road, aquatic, air and intermodal transport in Serbia from 2008 to 2015”).

Project Locality and Market Geography

The project is located in the southern part of Serbia, being quite not exclusive, as there is the existing regional road R-214 going in the same direction with local access roads, as well as an existing railway Belgrade – Nis – Tabanovce, which runs in parallel to the motorway. The project represents an inter-urban link, which will allow physical network integration. It is not included in the TEN-T network; it is marked as comprehensive TEN-T corridor.

The industrial activity in the southern part of Serbia, where the section is located, is relatively low, following the crisis caused by the disintegration of the former Yugoslavia, and many existing factories and companies went bankrupt in recent years. However, Corridor X serves international traffic, connecting South-East to Central Europe, and also links Vojvodina – the northern part of Serbia, and central Serbia to southern Serbia, facilitating transportation in the country.


Procurement & Contractual Structure

The procurement for this project was in its entirety realized according to the International competitive procurement procedure (according to PRAG procedure of EU Commission). The project was delivered as Design Bid Build.

Tendering

The tendering process for construction works started in 2010 (right after the global financial crisis). The estimated price was 40 million Euros, but the contract amount was almost half of that, i.e. approximately 21 million Euros.

According to sources from Koridori Srbije Ltd., nowadays, the offers are generally much more in line with the estimated price, but at the time of project implementation, the offers for several tenders were much lower than the estimated cost (which may or may not be related to the timing of the global financial crisis).

The type of tender for construction works was “open call”. Nine bidders submitted the bids. The tender for road maintenance (after construction has been completed) has not been announced yet.


Contract Structure

The Contract was completely developed according to the FIDIC red book. The contract amount was expressed based on quantities and unit costs.

Risk Allocation

All the risks specified in the Contract were defined according to the FIDIC red book and allocated as shown in Figure 2.

Donji2.png
Figure 2: Risk allocation

Performance

In the design and construction phases, performance was measured in relation to Cost, Time and Quality objectives. Louis Berger, as Engineer, was responsible for measuring overall performance in terms of cost, time and quality.

The performance goals for operation and maintenance phases were related to:

  • Reduction of travel time;
  • Reduction of vehicle operating costs;
  • Reduction of number of traffic accidents.

Cost overrun up to date has not been fully assessed. The claims were estimated to be approximately 1.3 million Euros and have been based on unstable funding, problems with expropriation, problems with design, etc.

The delay in completion of works/opening to traffic was 500 days due to land acquisition – expropriation issues, unstable financing, missing details in design and archaeological findings.

Project Outcomes

Due to cuts in funding from the program HiPERB, key project elements are missing, and the section has not been finished (the grade separated interchange was not constructed, as well as the last 500 m of asphalt works).

The success of this project lies in the fact that the unit cost of road (cost per km) was low compared to many other projects in Serbia, being contracted significantly lower than the estimated price. It would be possible to estimate the real success of this project in terms of evaluating the performance of the section only upon completion of all six sections.

The major problems during the implementation of the project were related to untimely expropriation, unstable financing and incomplete design, all leading to a significant time overrun.


References

  • Feasibility Study for I phase construction of E-75 (M-1) motorway, section Vladicin Han – Srpska kuca, Length = 33.658 km, Book 1: Feasibility Study, Faculty for Transport and Traffic Engineering, Belgrade, January 2004
  • National strategy of development of rail, road, aquatic, air and intermodal transport in Serbia from 2008 to 2015, Government of Serbia, 2008
  • Tender Opening Report, Construction of Corridor X, Highway E-75 Nis-FYROM border, Section: Srpska Kuca - Donji Neradovac (report id number: Koridor10 doo, 1241/10 from 07.09.2010.)