Published by PMR Publications PMR PMR Publications (www.pmrpublications.com) is a division of PMR, a British-American publishing, consulting and market research company. PMR Publications provides reliable market intelligence for business professionals interested in Central and Eastern European countries as well as other emerging markets. Publications by PMR analyse the business climate in the region, in particular in the construction, retail, IT, telecommunications and pharmaceutical sectors. PMR Publications offers both free and paid subscription newsletters, internet news portals and in-depth reports. Bi-weekly News Briefing A prime source of market intelligence for construction professionals www.ceeconstruction.com Central Europe Construction Review IMPORTANT NOTICE: is is a free sample newsletter. Feel free to forward it to anybody in or outside your company to whom it might be of use. If you wish to reproduce the contents of this publication, you should first request permission from PMR Publications (www.pmrpublications.com) giving details of what will be quoted and where.
Transcript
Published by PMR Publications
PMRPMR Publications (www.pmrpublications.com) is a division of PMR, a British-American publishing, consulting and market research company. PMR Publications provides reliable market intelligence for business professionals interested in Central and Eastern European countries as well as other emerging markets. Publications by PMR analyse the business climate in the region, in particular in the construction, retail, IT, telecommunications and pharmaceutical sectors. PMR Publications offers both free and paid subscription newsletters, internet news portals and in-depth reports.
Bi-weekly News Briefing
A prime source of market intelligence for construction professionals www.ceeconstruction.com
Central Europe Construction Review
IMPORTANT NOTICE:
This is a free sample newsletter. Feel free to forward it to anybody in or outside your company to whom it might be of use.If you wish to reproduce the contents of this publication, you should first request permission from PMR Publications (www.pmrpublications.com) giving details of what will be quoted and where.
A prime source of market intelligence for construction professionals www.ceeconstruction.com
PMRPMR Publications (www.pmrpublications.com) is a division of PMR, a British-American publishing, consulting and market research company. PMR Publications provides reliable market intelligence for business professionals interested in Central and Eastern European countries as well as other emerging markets. Publications by PMR analyse the business climate in the region, in particular in the construction, retail, IT, telecommunications and pharmaceutical sectors. PMR Publications offers both free and paid subscription newsletters, internet news portals and in-depth reports.
Bulgaria� page�2
16.6% fall in May construction output in Bulgaria163,000 m² of new retail space completed in Q2 2010Look�inside�for�more�news�on�this�category�u
Czech Republic � page�4
Increase in construction output in the Czech Republic in MayConstruction work prices decreased by 0.3% in June Look�inside�for�more�news�on�this�category�u
Hungary� page�7
10.6% reduction in construction output in Hungary in JuneWing announces property development plansLook�inside�for�more�news�on�this�category�u
Poland � page�10
Almost PLN 45bn on road projects since 2008Payment backlogs in construction up to 90 daysLook�inside�for�more�news�on�this�category�u
Romania� page�12
Romanian construction output continued downward trend in June Construction prices up by 4.4% y-o-y in JuneLook�inside�for�more�news�on�this�category�u
Slovakia� page�14
Construction output in Slovakia down by 6.6% in JuneIncrease in rental activity on the Bratislava office market in Q2 2010Look�inside�for�more�news�on�this�category�u
Latest construction tenders announced in Central Europe� page�17
Macroeconomic and construction indicators in Central Europe, 2007-2010� page�19
Housing units completed and construction permits in Central Europe, 2007-2010� page�20
Upcoming events� page�21
Central Europe Construction Review
Central Europe Construction Review – Issue No. 17 (19)Monday, 23 August 2010
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16.6% fall in May construction output in Bulgaria
Construction production in Bulgaria in June 2010 was 7.5% lower than during the equiva-lent month of the previous year, according to preliminary data from the National Statistics Institute (NSI). A reduction of 1.4% was wit-nessed in the production of civil engineer-ing production, while building construction dropped by 26.2% year on year.
163,000 m² of new retail space completed in Q2 2010
Large outlets are increasingly dominating the retail space rental market, according to Forton International. Large international chains are among the few retailers to con-tinue expanding amid the difficult economic conditions in Bulgaria, with brands such as Zara and New Yorker searching for more ex-tensive areas.
In Q2 2010, an additional 163,000 m² of retail space were added to the available stock in Bulgaria, a record number which is not expected to be repeated in the near fu-ture. The total amount of retail space in the country at the end of June 2010 thus became 485,000 m². At the same time, rents stagnated or continued to fall across the country, with
rents for retail outlets in the centre of Sofia €55.0 per m² per month, half of their 2005-2007 levels.
Bulgaria signs €34m loan with KfW
The Bulgarian government has contracted a BGN 67.2m (€34.4m) loan from the German Bank KfW, Stroitelstvo.info announced, to fi-nance works necessary to prevent flooding and landslides in the regions of Ruse, Silistra and Pomorie. The government has also com-mitted BGN 18m (€9.2m) in co-financing
Monday, 23 August 2010Central Europe Construction Review – Issue No. 17 (19)
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from the state budget. The companies to real-ise the projects have yet to be selected.
Bulgarian Property Developments sole owner of Logistics Park VarnaBulgarian Property Developments has com-pleted the acquisition of its stake in its part-ner, Fairplay Commercial, in Logistics Park Varna, according to Stroitelstvo.info. Any fur-ther partnership projects between them will also be discontinued.
The two property funds, who have cooper-ated in the development of many properties around the country since 2006, were una-ble to reach agreement on the development of the logistics park, and the matter was tak-en to court in 2009. According to Fairplay Commercial, their losses from the failed partnership came to €7m.
Logistics Park Varna has 120,000 m² of us-able space and was originally purchased by the two companies in 2006 for €12m.
Devnya Cement picks Strabag for modernisations
Devnya Cement, a member of the Italian group Italcementi, will invest €160m in the modernisation and expansion of its produc-
tion facilities, Dnevnik reported. Works worth €90m will be carried out by the consortium of the Austrian construction company Strabag and Chinese CBMI. Construction will begin in September 2010 and will take 24 months. After the expansion, Devnya Cement’s facto-ry will be able to produce 3 million tonnes of cement per year.
Gorna Malina to build sports centre
The village of Gorna Malina, 20 km from the capital, Sofia, has announced a tender for the construction of a modern sports cen-tre, according to a Stroitelstvo Gradat report. The project is expected to cost BGN 5.08m (€2.6m) and should take 22 months to com-plete. The project will be funded in part by the EU and secured by the municipality of Gorna Malina.
The sports centre will consist of a covered multipurpose sports field with 670 seats for spectators. The existing basketball, tennis and volleyball courts will be fully refurbished.
Trace Group Hold to carry out regeneration of Lovech
Trace Group Hold has prevailed in the Lovech council’s tender for the regeneration
of the central parts of the city. The project is worth BGN 8.09m (€4.14m) and should be completed within 300 calendar days. It in-cludes the reconstruction of two main roads, the renovation of the Bash Bunar city park, the installation of disabled access facilities in pedestrian subways and the installation and repair of traffic lights across the city. The project is funded in part by the European Union Regional Development Fund.
Gips AD to build new factory with EU cash
Gips AD, a manufacturer of cement- and plaster-based building materials, began the construction of a BGN 11.3m (€5.78m) new factory, Monitor announced. The project is co-financed by the European Union Competition Development Fund. The capacity of the new facility is to process 60,000 tonnes of natural gypsum per year. Construction is to be com-pleted within 15 months.
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Increase in construction output in the Czech Republic in May
Construction output in the Czech Republic decreased by 4.7% year on year in June, com-pared to the 0.5% increase reported in May, according to preliminary data from the Czech Statistics Office. Building construction out-put decreased by 5.5% (contribution -3.5 p.p.) and civil engineering output registered a de-crease of 3.2% (contribution -1.2 p.p.). The average registered number of employees in construction enterprises with 50 or more em-ployees declined by 3.4% compared with May 2009. Their average monthly nominal wage increased by 4.3% compared with May 2009, reaching CZK 27,936 (€1,126).
Construction work prices decreased by 0.3% in June
In June 2010, construction work prices in the Czech Republic decreased by 0.3% year on year. Construction material prices increased by 2.0%.
In comparison with the previous month, construction work prices in June decreased by 0.1%, whereas construction material input prices increased by 0.9%.
14,296 homes started in the Czech Republic between January and JuneThe number of home starts in the Czech Republic within the first four months 2010 came to 14,296 of which 11,955 involved new construction and 2,341 the improvement of existing structures, according to preliminary data released by the Czech Statistics Office (CZSO). Almost 3,429 home starts related to dwellings in multi-family buildings, and the remaining 8,069 were detached houses. Most home starts were reported in the Praha Region and in Central Bohemian Region, followed by the South Moravian Region. 16,120 flats were completed in the Czech Republic between January and June 2010,
including 5,702 in multi-family buildings and 7,809 in single-family houses. Central Bohemian Region, with 3,348 commissioned dwellings, led the field, and was followed by South Moravian Region and Prague region.
Fall in number of started and completed flats in June
The number of flats started in the Czech Republic in June 2010 fell by 31.8% in com-parison with June 2009, to 2,448. The number completed during the month fell by more than 70% year on year in June 2010 to 1,539,
according to the Czech Statistics Office. The decline in demand for residential space in 2010 against a background of serious eco-nomic difficulty has forced property develop-ers to reduce the size of their projects. Before the economic crisis, developers built about 300 flats at the first stage of the project, in contrast to 80 flats today, and banks required developers to pay deposits of 15% to 20% of the investment cost of the project in compar-ison with 40% today.
One of the largest residential complexes in Prague with a low occupancy rate is Central Park Praha, where, a year after its official opening in the autumn of 2009, only 170 of the 540 flats have been sold. The Czech mort-gage market, which depends on the condition of the property market, saw a slight year-on-year increase of 2.2% in the second quarter of 2010 to about CZK 22.5bn (€865m). Last year, the total value of the mortgage market in the country reached CZK 73.8bn (€2.8bn), a year-on-year reduction of 39%.
Czech Republic
www.pmrpublications.comSource: CSU, 2010
Construction output growth in the Czech Republic (%, y-o-y),January 2009-June 2010
-11.3-14.3
-9.0
2.10.3
0.7
-4.4
0.63.4
-1.1
5.9 3.5
-25.6-23.6
-18.3-15.3
0.5
-4.7
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2009 2010
www.pmrpublications.comSource: CSU, 2010
1.0 0.7 0.6 0.4 0.4 0.3 0.3 0.2 0.0 -0.1 -0.2
-0.2
-0.2
-5.5-5.9
-6.4 -6.5-5.8
-4.7
-3.6
-2.9
-3.1
-2.2
-1.7
0.72.0
Jun Jul Aug Sep Oct Nov Dec Jan2010
Feb Mar Apr May Jun
Construction work price index Construction materials price change
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Government rejects Senate energy and waterway construction billThe Czech government has announced that it will not support a Senate proposal to speed up the construction of power sta-tions and hydro-electric plants in the coun-try. The Senate proposal contained requests for the construction of more atomic blocks at the nuclear plant at Temelin, a dam on the Elbe river and anti-flood protection structures. The government argued that the proposal would lead to its fragmented and non-transparent involvement in the con-struction industry. Furthermore, it said that it was working on a new construction law, which, in its current form, stipulates that energy and waterway infrastructure con-struction does not require a construction permit or even authorisation from the con-struction authority, according to the Czech News Agency, which was quoting a govern-ment press release. The Senate proposal was severely criticised by environmental activ-ists in the country.
The Czech commercial real estate sector boomed in H1 2010Total investments in commercial proper-ties in the Czech Republic increased in H1 2010 by some 233% year-on-year to a total of €215m, according to data from the real es-tate consultancy DTZ. Most investors who concluded such deals were from Austria, according to the same source as cited by Hospodarske Noviny. A major player on this market is Austria’s Hypo Real Invest, which this year signed two major deals in the Czech Republic and plans a few more before year-end. While Austria’s profile in the Czech commercial real estate segment has strength-ened, German equity funds levelled less in-fluence over the past half year. In 2008 and 2009 the share of German companies in to-tal investments in the commercial real es-tate sector hovered around 40%. In H1 2010 it dove to less than 5%. The large, three-digit growth in total deal value also stemmed from the extraordinarily low investment value in the analogous period of last year.
Flat prices stabilise in the Czech Republic
In H1 2010 the prices of flats in the Czech Republic recorded a marginal decline, of some 1%-2%, compared with the same peri-od in 2009 – reflecting a slow recovery of the segment in parallel with the stabilisation of prices on the Czech residential market, mag-azine Stavitel wrote, quoting data from real estate consultancies. Mid-2010 the average price of a flat in both new and old segments in Prague stood at CZK 58,500/m² (€2,340/m2); with approximately CZK 41,000/m² for an old flat and CZK 34,600/m² for a new dwell-ing. Outside Prague, the average price of new flats was CZK 34,600/m² and CZK 24,450/m² for second-hand housing.
Skanska planning to begin fifth stage of Botanica this year
The development division of Skanska has begun to sell flats in the proposed fifth stage
Number of dwellings completed and started in the Czech Republic, by region, January-May 2010
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of the Rezidencni ctvrt Botanica low-ener-gy residential complex in Prague 5. The fifth stage of this project is expected to consist of a five-floor building, according to a report in Hospodarske Noviny. The price of the small-est, one-bedroom, flats in the complex starts at CZK 1.86m (€70,000), including VAT. The building which is to be built during the fifth stage is expected to offer a total of 42 flats and three penthouses, with a number of bed-rooms in one of four sizes, ranging from 30 m² to 104 m². The complex also has 26 ga-rages. The construction of the complex is due to begin in the last quarter of this year and is due to be completed in early 2012.
All railway construction in Czech Republic suspended
On 9 August 2010 Vit Barta, the Czech trans-port minister, ordered the suspension of all construction work on railway projects in the country funded by the Railway Infrastructure Administration (the SZDC), according to a ministry spokesman, quoted by the Czech News Agency. He would not, however, specify the total number of projects suspended. Barta said that the main reason for this extraordi-nary decision was the failure of construction companies to offer discounts for the work on these projects. According to Barta, contrac-tors have offered derisory discounts of about 1%, which are not satisfactory in his opin-ion. He added that the Czech government is struggling to inject more efficiency into the construction industry and to save money at a time of economic downturn.
The ministry is now expected to invite the companies to negotiations on the sub-ject of cutting some of the costs of the work. According to the SZDC, there are about 15 railway infrastructure projects at various stages of construction in the country. Most are part of corridors III and IV, which link Prague with the western and southern Czech Republic respectively. The SZDC estimates that it will invest a combined CZK 84bn (€3.2bn) in the construction of rail corridors III and IV by 2016.
51 road construction projects at risk in the Czech Republic
The Czech Ministry of Transport has an-nounced that it will make a decision in August 2010 on the continuation of work on
road infrastructure projects, according to the Czech News Agency. Faced with a limited budget, the ministry is attempting to assess whether or not it can afford to proceed with the work.
The shortage of money is endangering 51 road infrastructure construction projects in total in the country, including the con-struction of part of the D3 southern motor-way, several sections of the R6 expressway in Karlovy Vary, the southern section of the R7 expressway from Ceske Budejovice and sev-eral sections of the R7 and R49 expressways. The ministry’s priorities are the reconstruc-tion of the D1 motorway and the R48 ex-pressway from Frydek Mistek to the Polish border, along with the completion of the Prague bypass.
Construction of Batuv canal lock in Belov to begin next year
A project on the Batuv canal, which includes the construction of a lock in the town of Belov, in Moravia, is expected to start in 2012. Its completion is now expected to be delayed for a year. The project is estimated to cost ap-proximately CZK 182m (€7m). It is hoped that some of this is will be received from the State Fund for Road Infrastructure (SFDI), according to the Czech News Agency, which was quoting representatives of the Directorate of Waterways in the Czech Republic.
The project is aimed at, among other things, connecting the Otrokovice-Rohatec water-way with the town of Kromeriz. The Batuv canal is approximately 52 km long and runs from Otrokovice to Rohatec. The waterways directorate plans to extend it to the town of Hodonin, which would bring its total length to approximately 60 km but did not elaborate on the timetable of the proposed work.
Foreign builders brought in to work on Nova Karolina district
The contractors working on the construc-tion of the new Nova Karolina urban district in the city of Ostrava are increasingly using foreign workers in an attempt to cut costs. Nova Karolina is one of the largest construc-tion projects in the entire central and eastern European region and represents an invest-ment of approximately CZK 15bn (€580m), according to Casopis Stavebnictvi. Most of those employed to work on this project are
from Slovakia, Poland, Bulgaria, Romania, Ukraine, Moldova and Kyrgyzstan, accord-ing to information gathered by the immigra-tion service in Ostrava.
Representatives of some of the companies which are building this complex have said that the costs of the foreign staff are some-times half what they would spend on Czech employees. The company investing in Nova Karolina is Multi Development Czech Republic.
Minister stops 15 road works
The Czech Ministry of Transport announced that it has decided to halt works on a total of 12 ongoing road infrastructure projects and to stop three other planned projects, Hospodarske Noviny reported citing an offi-cial announcement from the ministry. Four of the 12 suspended projects were at an ad-vanced stage of construction, i.e. three class I roads in the Moravia-Silesia region and one class I road in Ceske Lipy. The other eight projects include five expressways such as R35 in Hradec Kralove and R7 in Postoloprt.
The ministry added that it decided to de-lay the construction of the D8 motorway to Usti nad Labem and of the motorway D47 at Bohumin. Transport minister Vit Barta would not comment on the costs that will potential-ly have to be incurred to conserve the halted construction works. The decision to stop the works was caused by lack of funding.
This year the State Fund for Transport Infrastructure (SFDI) in the Czech Republic has seen a more than CZK 3.6bn (€144m) drop in its budget. Its budget for 2011 is fur-ther expected to decline by some 35% year-on-year to CZK 33bn (€.3bn). The total cost of the 12 suspended projects is estimated at up to CZK 4bn. Four construction compa-nies are mainly involved in road infrastruc-ture works: Skanska CS, Eurovia, Metrostav and Strabag. They usually team up in con-sortia to take part in tenders mainly because individually they lack the equipment needed for such projects.
OHL ZS to build railways in Poland
OHL ZS was the first Czech company to se-cure a large construction order on the Polish market. The construction company signed a contract mid-August 2010 for the recon-
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struction of the railway section between the stations Gliwice Labedy and the Pyskowice municipality in the Silesia region, Stavitel reported. The section to be reconstructed is 4.6 km long.
The project also encompasses repairs of platforms, rail links and passenger passag-es. The cost of the project is estimated at over PLN 29m (€7.3m), including VAT. The con-struction works are expected to start as early as August 2010 and to be completed by the end of November of this year. The project is being financed by the Polish state railway company.
Develon to further expand Prague-Cestlice shopping area
The shopping area in Prague Cestlice is being expanded, with the developer Develon plan-ning to build a shopping park worth more than CZK 800m (€32m), Hospodarske Noviny reported. The park, christened Cestlice Retail Park, is envisaged to be erected at the future exit 8 on motorway D1, according to informa-tion from the management of Develon. The construction of the park should take some two years though the works could be sped up in response to how the market evolves. In the
following months Develon plans to apply for a building permit. Cestlice Retail Park is en-visaged to have some 26,000 m².
Cestlice is the largest shopping area in the Czech Republic at the moment, with re-tail space totalling over 100,000 m². Retailers Bauhaus, Elektro World, Giga Sport, Kika na-bytek, Makro and many more have stores here.
Increase in profit and sales for Ekonomicke stavby last year
The Czech company Ekonomicke stavby, based in the town of Zruc-Senec, in the Plzen region, had a consolidated turnover of CZK 794m (€30m) last year, a year-on-year increase of 16%.
Ekonomicke stavby specialises in the pro-duction of brick family houses and operates in the Czech Republic, Slovakia and Poland. Last year the company’s pre-tax profit in-creased by approximately 60% in compari-son with 2008, but the company would not release any specific figures. The SITA news agency, quoting company representatives, claims that the company also expects posi-tive economic results in 2010. Its products are selling mainly because they are a cheaper alternative to traditional housing.
Ekonomicke stavby was set up in 1998 and sells over 400 turnkey houses on the Czech market every year.
VGP finished H1 in the black
The developer of logistics projects in the Czech Republic VGP netted in the first half of this year some €9.7m (CZK 241m) – an improvement on the loss of €11.7m incurred in the same period of last year. The rate of occupancy in VGP’s logistics complexes in the Czech Republic reached 96.5% at the end of H1 2010, Czech News Agency (CTK) reported.
In the second quarter of this year VGP com-menced six new logistics buildings, which to-gether should add to the Czech market some 47,500 m² in logistics space. Currently, VGP’s stock of logistics space in the country totals over 546,000 m² in 47 buildings.
VGP also operates in Slovakia, Hungary and in the Baltic states. One of VGP’s largest logistics complexes in the Czech Republic is located in Horni Pocernice near Prague.
n
10.6% reduction in construction output in Hungary in JuneThere was a 19,7% year-on-year reduction in construction output in Hungary in June 2010, to HUF 171.6bn (€502m), according to the Hungarian Statistical Office (KSH). In terms of the main construction groups, a year-on-year decline of 11.2% was reported in civil engineering in May, whereas a reduction of -28.2% was noted in building construction. The volume of new orders in June in-creased by 4.2% in relation to June of the previous year and was worth HUF 121.7bn (€436.8m). Orders for new buildings had decreased in terms of volume by 3.1%, and
orders for civil engineering work were up by 12.4% year on year.
Wing announces property development plans
Wing has announced plans to develop Budapest’s most valuable vacant riverfront areas, referred to collectively as the Vituki property, located along the waterfront of Soroksar and the banks of the Danube river,
Hungary
www.pmrpublications.comSource: KSH, 2010
Construction output growth in Hungary (%, y-o-y),January 2009-June 2010
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adjacent to Ferencvaros in the 9th district. The initial plans have been accepted by the 9th dis-trict administration.
The plan will extended to central Budapest and consists of two projects: the first, known as Duna Passage, and the second, Duna City. The preliminary plans stipulate that the project will involve the construction of commercial and residential structures. The former was designed by the British architect Norman Foster, and the latter by the Dutch architect Erick van Egeraat. The formerly in-dustrial area of the city has been continuous-ly developed and modernised since the end of the 20th century, beginning with the con-struction of the Palace of Arts and National Theatre. Construction work is expected to begin in 2011, with the first office building to be completed by 2013.
Market Epito to fund municipal housing project in flood-damaged FelsozsolcaMarket Epito has announced plans to fi-nance and build municipal housing units in Felsozsolca. Felsozsolca was hit by floods in early June 2010. These damaged 80% of the homes in the small town. The construction work began on 4 August and is due to be completed in just 40 days.
The town received two sites from the gov-ernment on which Market Epito will build two residential buildings with four houses each. The community is also receiving fund-ing for reconstruction through an agreement established between Waberer Holding and the Ministry for National Economic Affairs. This stipulates that, for Hungarian interna-tional transport companies which voluntar-ily join the pact and refuel within Hungary’s borders, the government will match and do-nate the amount it collects in excise duty from this, up to a limit of HUF 2bn (€7m).
NIF expected to announce new tender for section of M3 motorwayThe NIF has declared the results of the first two tenders for the construction of the sec-tion of the M3 motorway between Road No. 49 and Vasarosnameny invalid and is expect-ed to announce a new tender. The first was an-nounced in December 2009, and eight offers were made: by the M3 Kraszna Consortium,
the BBDA Consortium, Dobrastav, the M3 Euro-Hid Consortium, Swietelsky, the PT M3 Consortium, Nemzetkozi Vegyepszer and Sadesa Obras y Servicios. The NIF de-clared the PT M3 Consortium the winner and deemed four offers to be invalid: those by the BBDA Consortium, Swietelsky, Nemzetkozi Vegyepszer and Sadesa Obras y Servicios.
When its offer was rejected, Nemzetkozi Vegyepszer petitioned the Public Procurement Council (the KDP). The Council fined the NIF HUF 3m (€11,000). It was forced to re-evaluate the offers and again declared the PT M3 Consortium the winner. This time Sadesa Obras y Servicios petitioned the council. The NIF has now announced that it will not re-evaluate the offers a third time but will, instead, an-nounce a new tender.
Siemens to build new combined-cycle power station in SzegedSiemens Project Ventures has purchased a 50% stake in South Energia, joining Advanced Power for the construction of an environmentally-friendly, fuel and steam powered combined cycle power station in Szeged, at a cost of HUF 160bn (€573m). The power plant will have an output capac-ity of 880 megawatts. The plans stipulate that construction work will begin in 2012 and be completed in 2015. The power station will be located on the 13 acre site of the Szeged Industrial and Logistics Park.
The construction of the plant is the 8th joint project of Siemens and Advanced Power. The project will use domestic suppliers and will provide temporary employment for 1,000 people during the construction stage, along with permanent jobs for another 50 once it has been completed.
Funding of HUF 4bn for urban development in the Northern Plains regionEight cities in three counties of the Northern Plains region, Szabolcs-Szatmar-Bereg, Hajdu-Bihar, and Jasz-Nagykun-Szolnok, will receive HUF 4bn (€14.4m) of EU fund-ing for urban development from the National Development Agency. Infrastructure devel-opment and renovation constitute the prima-ry function of the projects.
The first city to receive the funds is Nagyecsed, which will receive a new mayor’s office. Local retail facilities will be renovated, and the city centre will be rebuilt. In addition, the church will be restored. Construction work is due to begin in August 2010 and to be completed in 2011.
Audi to expand factory in Gyor
Audi Hungaria Motor, the Hungarian sub-sidiary of Audi, has won a public procure-ment tender announced by the Hungarian State Holding for the purchase of a 200-acre property adjacent to its factory in Gyor. Audi Hungaria Motor paid HUF 5.2bn (€18.6m) net for the land.
The area was originally intended to be the site of a logistics park, as part of economic development plans for the city. Development plans are currently being modified, and it will be declared open for development as a result. The modification process is lengthy, because the property is bordered by an area which is part of the EU’s Natura 2000 programme aimed at preserving national heritage. Audi has not yet disclosed any plans or informa-tion pertaining to its intentions toward the property.
First stage of industrial and logistics park in Fenyeslitke-Komoro completedThe construction of an industrial and logistics park adjacent to Fenyeslitke and Komoro, at a cost of HUF 3.5bn (€12.5m), is underway, under the direction of the Eszak-Alfoldi Regionalis Fejlesztesi Holding, which re-ceived HUF 1.8bn (€6.5m) of EU and do-mestic funding for the project. The first facility, a modern sewage treatment plant, has been completed by Ke-Viz 21 Epitoipari at a cost of HUF 107m (€383,000). Ke-Viz 21 Epitoipari is also responsible for the con-struction of industrial park infrastructure, including the inner roadways, drinking and wastewater networks, lighting and pave-ments. As part of the project, Tigaz will build gas pipeline networks and E.ON will devel-op electricity distribution networks, where-as the inner railway system will be built by Vasuttechnikai. These stages will reach com-pletion by late August 2010.
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Casiopeia Group to transform Hajogyari Island into Dream IslandPreliminary plans to transform Budapest’s Hajogyari Island (part of Obuda Island) have been released, according to which Dream Island 2004 will invest in the construction of a multi-purpose project covering a 500,000 m² area of the Island.
The project will have entertainment, cul-tural and tourist attractions, including a 50,000 m², 200-table casino, a convention centre, a 3,000-room luxury hotel, 1,000 apartments, an opera house with a seating ca-pacity of 1,500, and a theatre for 3,500 spec-tators. Additionally, a harbour for 300 boats and 5,500 parking spaces, a shopping cen-tre, and a museum with ancient Roman ruins will also be built. The historic shipyard mon-ument will be preserved and the investor will also renovate the infrastructure on and lead-ing to the island.
The architectural plans were drawn up by Casiopeia Group and preliminary building permits have been secured.
New stadium to replace Debrecen’s Nagyerdei Stadium
The new sports complex Loki Arena, with a price tag of between HUF 5bn (€18m) and HUF 10bn (€36m), will be built to replace the recently demolished Nagyerdei Stadium in Debrecen, although the location has yet to be confirmed officially.
The new arena will be smaller in area but will have a larger seating capacity and a com-pletely covered spectator area with 15,000 seats. The complex will have a recessed field and a parking lot for 800 vehicles. The city of Debrecen expects to receive state funding for the project.
Liquidation proceedings against Egerszaloki Thermal HotelA liquidator, Kelet Holding, has been appoint-ed by the Court to begin proceedings against the 4-star Saliris Resort Spa and Conference Hotel in Egerszaloki. Egri Epito, the company responsible for the construction of the hotel, initiated the liquidation proceedings in 2008 against the investors, Szalok Holding and HH Global Capital, because its invoices had not
been settled on time. The spa was completed in 2007, whereas the hotel was opened only a month ago, and the project cost HUF 12bn (€43m) to complete.
Bosch to expand factory in Miskolc
Bosch has made an investment of HUF 6.5bn (€23m) to expand its factory in Miskolc, which is expected to double its auto parts manufacturing capacity. Miskolc Holding, responsible for urban strategic develop-ment in Miskolc, is contributing HUF 140m (€500,000) to the project, while HUF 981m (€3.5m) has been granted through the North Hungary Operational Programme of the New Hungary Development Plan. The project is to be completed in May 2011.
The new factory facility will manufacture starters, alternators, wiper systems, actuators and blowing motors. Bosch currently employs 2,000 workers in its factories in Miskolc, and has been present in the Hungarian market for 111 years. The expansion will create 1,000 new jobs, with 400 of them to be recruited for by the end of this year.
Orex Zalog to expand in Budapest
Orex Zalog will expand its facilities in Budapest by developing a jewellery-test-ing laboratory, a watch and jewellery serv-ice centre and pawning facilities on Andrassy road, all at a cost of several hundred million forints. The three-storey property was pur-chased last year and the expansion plans were announced just recently by Zoltan Kleeberg, the director of Orex Zalog, but without any specific figures. The new laboratory will en-able Orex to perform tests on jewellery out of precious metals, exclusive watches and pre-cious stones, as well as to issue quality certifi-cates for these upon request.
A new store location will also be opened at the Andrassy road headquarters, followed by a location in Corvin Centre in Budapest, and then at the Akrad shopping center in Szeged. Orex Zalog retail director, Agnes Magyar, stated that as a result of the crisis people have began to lose faith in banks and are more apt to invest in tangible assets such as gold. Most investors choose to buy gold bars and sheets, ranging from 5 to 1,000 grams, which Orex also produces.
GE Aviation to spread wings farther in Veresegyhaza
GE Aviation will expand its factory in Veresegyhaza next year by a new factory unit costing $1m, according to Patti Leary-Kreitzer, company director. The new unit will enable GE Aviation to expand its pro-duction capacity, with the installation of new equipment and implementation of new technologies. In addition, GE Aviation in Veresegyhaza will be able to extend its pro-duction and servicing activities to additional aircraft parts.
The existing factory manufactures and services jet engines and other aircraft parts for GE, Snecma & GE, and Rolls-Royce and installs these in Airbus and Boeing airplanes. The factory currently employs 230 workers.
Motherson Sumi Systems to grow auto parts capacity
Motherson Sumi Systems, a subsidiary of Samvardhana Motherson Group, will in-vest INR 5bn (€82m) in expanding auto parts manufacturing activities, by setting up a pro-duction plant in Mosonmagyarovar, Hungary and expanding its factories in India over the next two years. Work on the construction of the second factory unit in Hungary will begin in November 2011 and end in March 2011 with a fully operational facility.
The new factory will be built on a 30,000 m² lot at the Mowin industrial park in Mosonmagyarovar and create 250 new jobs. At its new factory, the company will produce 7 million rear-view mirrors annual-ly for Audi, Mercedes, Mini, Volkswagen and Toyota.
The company has factories in 21 countries worldwide and produces a variety of auto parts, including plastic components, wires, seals, wiring harnesses, passenger car mir-rors, moulded plastics and rubber parts, and various modules for numerous auto mak-ers, including Toyota, Suzuki, Tata Motors, Hyundai and Nissan.
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Almost PLN 45bn on road projects since 2008
The General Directorate for National Roads and Motorways (GDDKiA) has spent almost PLN 45bn (€11.5bn) on road projects in the past two and a half years, as reported by Puls Biznesu based on the GDDKiA data.
Over the past 30 months, contracts con-cerning the construction of over 1,600 km of new roads of various classes have been signed. These contracts concern the construction of 700 km of motorways, 900 km of expressways and 20 bypasses. Projects underway concern the construction of over 500 km of motor-ways, almost 340 km of expressways and 135 km of bypasses. Reconstruction projects on national roads span 75 km in length.
Over 935 km of new roads have been com-pleted since 2008, including 180 km of mo-torways, 315 km of expressways and 90 km of bypasses. In the period under review, the quality of the existing roads has significant-ly improved as well – 60% of the roads are classified as either good or very good. In ac-cordance with GDDKiA’s plans, expenditure on the development of the road infrastruc-ture will continue at a high level in the com-ing years.
Payment backlogs in construction up to 90 days
Construction companies are still struggling to meet their liabilities on time. The food and construction industries are the slowest to set-tle liabilities under past due invoices as pay-ment delays are up to 90 days in these sectors, Rzeczpospolita reported
According to the Dun & Bradstreet data, the repayment capacity of the construction industry has sustained a decline in the past several months. Small companies and con-tractors operating in the housing sector and sellers of building materials appear to be in the worst position. On a positive note, the number of past due liabilities in the segments of road construction and assembly construc-tion has steadily fallen.
Experts from the Polish Association of Construction Employers emphasise that
those investors who commence projects but do not have loan funds to cover the en-tire cost force subcontractors to extend pay-ment deadlines. Since the number of new projects grows, it is likely that construction companies’ indebtedness mounts higher and higher.
The information published by Trusted Adviser Group confirms that companies are more likely to enforce their rights through courts and apply for payment orders. These measures contribute to an improved mar-ket situation as companies refrain from ex-tending trade credit terms and delaying the repayment of liabilities unreasonably and excessively.
Nearly 64,000 new mortgages
Banks issued a total of 63,900 new housing loans in Q2 2010, which in value terms rep-resents the combined sum of PLN 13.5bn (€3.4bn), according to the Polish Bank Association.
At the end of Q2 2010 the total debt result-ing from loans issued for housing purposes amounted to PLN 245.9bn (€63bn), which translates into an increase of 13%. The aver-age value of a such a loan was PLN 206,000 (€52,820). 23.6% of all mortgages were taken out in euros, and only 4.4% were denominat-ed in Swiss franks. Zloty-denominated hous-ing loans represented 71.9% of the total, which is down by 5% compared with the first quarter of this year. According to ZBP forecasts, the total value of all mortgages issued in 2010 will reach approximately PLN 50bn (€12.8bn).
Prices of construction materials rise fractionally
Prices in eight product groups increased in July 2010 compared with June and fell in just one, according to data released by Polskie Składy Budowlane (PSB).
PSB reports that the biggest jump in prices occurred in the case of dry interior construc-tion, i.e. up by 5.1% in relation to June. Price growth was minimal in the other groups, such
as wall materials and construction chemicals. On the other hand, prices of ceramic wall ma-terials, wood and wood-derivative materials remained unchanged. The one product cate-gory that was cheaper (-1.1%) compared with the previous month was thermal insulation.
In turn, in the “other” category, cement and lime products declined in price (-5%), as did paint, varnish and wallpaper (-0.1%). On the other hand, ceramic tiles and kitchen and bathroom furnishings were more expensive (by approx. 1.7%). Meanwhile, buyers had to pay the same as they did in June for sett pav-ing, steel products, gates and fencing.
In July 2010 PSB group noted a 2% improve-ment in revenues compared with the corre-sponding period of 2009. Simultaneously, its revenues were down by 3% vis a vis June this year.
Consolidation inevitable on window market?
Shrinking margins and, as a consequence, slimmer sales profits in the window sector has led to a situation where consolidation on the market has become a necessity, Parkiet reported.
More than 2,000 firms are currently active in Poland with market shares of no more than few percent each. The last few years have seen stiffer competition and a price war, which in turn has led to many small firms now find-ing it difficult to operate at a profit. As a con-sequence, their owners are keen to sell them off. In the opinion of analysts cited by Parkiet, one should not expect consolidation to pro-ceed at a rapid pace or on a large scale, as cre-ating a large enterprise requires a lot of capital and the potential of Polish investors remains for the time being inadequate. The companies with the highest market shares in 2009 were Dobroplast (6.3%), Fakro (5.2%), Drutex (3.9%) and Oknoplast-Krakow (3.3%).
Mostostal: order book almost full for 2011
Mostostal Warszawa has recently filed win-ning bids in tenders worth a total of over PLN 1bn (€256m). Consequently, contracts executed on the basis of these tenders will make the company’s order book nearly full for 2011, as reported by Parkiet.
In the opinion of the company’s manage-ment, the April-June period met financial
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expectations, but more detailed comments will be issued after the Q2 2010 results have been released. In the opinion of Mostostal’s management, in 2010 the group’s sales will increase, but sales growth rate will not be as spectacular as it was in the year be-fore when sales had grown by 20% year on year to PLN 2.7bn (€692m). The company’s management has not issued any informa-tion on margins achieved by the Mostostal group. However, it emphasises that 2010 has been significantly harder for the industry as a whole in comparison with 2009; due to strong price competition, contracts that were signed carry lower margins.
Cement sales climb in July
Total cement sales in July 2010 equalled 1,838,100 tonnes, which represents an in-crease of more than 9.9% compared with June, according to details released by the Polish Cement Association. At the same time sales were up by 6.5% compared with July 2009.
PGE ever closer to choosing partner
Polska Grupa Energetyczna (PGE), which is planning to build the first ever atomic power station in Poland, is getting close to choosing a partner to help it carry out the investment, according to Parkiet.
Among the firms which have offered to co-operate with PGE in implementing nuclear energy in Poland are EDF, GE Hitachi and Westinghouse. PGE will use a number of cri-teria to determine its final choice of partner, including price, safety and guarantees that the investor will complete the project within the deadline and ensure the participation of Polish contractor firms.
According to PGE estimates, it will cost approximately €3.3bn to build 1,000 MW of power. However, specialists from the
PolAtom Institute of Atomic Energy claim that the eventual figure may be as much as €1.5bn higher since the investor will have to take into account additional costs arising from, among other things, buying land for the facility and charges on loans taken out for the project. Poland’s first ever atomic power station will have an approximate output of around 3,000 MW.
Kielce bypass overhaul set to cost PLN 642m
A consortium comprising Mostostal Warszawa and Acciona Infraestructuras submitted the best bid in a tender to rede-velop the Kielce bypass along the S7 Warsaw-Krakow express road. The investment will cost almost PLN 642m (€160.5m).
The fragment to be refurbished will be 23 km in length. The section between Kielce North junction and Checiny junction will be widened to include a second carriageway. There are also plans to reconstruct road junc-tions in Kostomloty, Checiny and Jaworznia. The project also provides for the construc-tion of 18 flyovers, nine bridges, two service stations, four crossings for pedestrians and three for large animals.
If none of the other tender participants challenge the result a contract will be signed with the winning consortium in the next few weeks. The investment will take 18 months to complete, excluding the win-ter season, from the day the contract is signed.
Nine candidates keen to build power unit in Jaworzno
Nine companies have applied to take part in a tender to build a power unit at the Elektrownia Jaworzno III power station owned by the group Tauron Polska Energia.
The unit will be 800-900 MW block with supercritical parameters. The contractor eventually chosen for the project will be re-sponsible for the design, delivery, assembly, and later start-up and commissioning of the facility together with the installations and auxiliary buildings. The applications will now be examined to determine whether they ac-cord with the specifications. The contractor selection procedure as a whole will be com-pleted by Q2 2011.
Work to begin soon on new Ikea store in Bydgoszcz
The furniture concern Ikea will shortly em-bark on the construction of a new store on Fordonska Street in Bydgoszcz. The invest-ment is to be completed by the autumn of 2011, according to Gazeta Wyborcza.
The company has already acquired all the necessary land and permits it needs to carry out the undertaking. More detailed informa-tion on the actual store itself remains undis-closed. The investor will also be responsible for expanding a road junction at the intersec-tion of Lowicka, Rejewskiego and Fordonska Streets.
n
Cement sales and production in Poland, Jan -July 2010uary
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Romanian construction output continued downward trend in June Construction output in Romania contin-ued to decrease in June 2010, dropping by 5.2% year-on-year, according to the National Institute of Statistics (INSSE). The most significant decline was registered in the residential segment, where construc-tion output decreased by 20.6% in June this year compared to the corresponding peri-od of 2009. Non-residential construction output fell by 8%, while civil engineering increased by 4.7%.
Construction prices up by 4.4% y-o-y in June
In June the growth of construction prices was 4.4% y-o-y, down from 6.5% recorded a month earlier. Simultaneously, the year-on-year growth of industrial prices decreased from 6.5% in May to 6.2% in June.
The growth of construction prices in res-idential buildings sector was 3.6%, in non-residential buildings – 4.5% and in civil engineering 4.7% y-o-y.
Construction of Comarnic-Brasov section of motorway on holdThe construction of the Comarnic-Brasov section of the motorway is no longer a pri-ority, because of the lack of interest on the part of its funders, namely the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB), according to the National Company of Motorways and National Roads in Romania (CNADNR). Aktor-Vinci, the holding which prevailed in the tender for the Comarnic-Brasov section of the motorway, did not succeed in obtaining funds from the EBRD and EIB and, as a re-sult, the company withdrew from its part-
nership with the Romanian government pertaining to this project.
In mid-2009, the Ministry of Transport signed a construction contract for the Comarnic-Brasov section with the Greek-French holding Aktor-Vinci. The contractor was to have completed the project in a pub-lic-private partnership with the Romanian government. This year, the CNADNR and the Ministry of Transport plan to choose a contractor for the Sibiu-Pitesti section of the motorway, part of the Corridor IV pan-European motorway.
MonteAdriano completes first section of corridor IV motorway
The Portuguese contractor MonteAdriano has completed the first section of the European Corridor IV motorway in Romania, according to Capital, which was quoting the company. The work on the section cost €20.8m. The completed sec-tion links the motorway bypass around the town of Lugoj with the Deva-Lugoj-Nadlac motorway.
The project was put out to tender by the Transport Ministry at the beginning of 2008. MonteAdriano was chosen as the general contractor for this work on 3 March 2008. The 9.6 km section of motorway was com-pleted in two years at a cost of €2.2m per km. MonteAdriano entered Romania in 2005, where it has, so far, completed seven con-struction projects worth more than €134m between them.
Romania
www.pmrpublications.comSource: KSH, 2010
Construction output growth in Romania (%, y-o-y),January 2009-June 201014.0
6.3
-6.0
-16.0
-24.9
-4.4
-17.1
-24.6 -22.5-26.2
-18.4 -6.9
-12.4
-27.7-23.4
-15.5-20.9
-5.2
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2009 2010
www.pmrpublications.comSource: INNSE, 2010
Growth of construction and industry prices in Romania (%, y-o-y),June 2009-June 2010
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Tower Park in Cluj-Napoca taken over by CR Management
The Tower Park residential and office project in Cluj-Napoca, started two years ago, has been taken over by the German company CR Management, a corporate risk manage-ment company. The project was expected to be completed at the end of last year, but the construction work was stopped because of a lack of funds. It consists of three blocks, two residential towers of 18 and 12 floors, and an office building. About 70% of the first, 18-floor, building of the project has been com-pleted, according to the new owners, quoted by Capital. About 100 apartments in the com-plex have been sold.
CR Management plans to complete the first Tower Park building by the end of 2011. It has to invest an additional sum of about €1.4m in order to complete the project. CR Management hopes to complete the entire complex within the next two years. In total, Tower Park will offer 332 flats.
Interhome Decor insolvent
The building materials retailer Interhome Decor petitioned for insolvency, and its re-quest was approved in July 2010 by a court in the county of Prahova. Last year, the com-pany had a turnover of RON 60.3m (€14.3m) and made a loss of RON 2.02m (€0.5m), ac-cording to Ziarul Financiar.
The retailer’s judicial administrator is Revalactiv. Interhome Decor is owned by the Belgian group Interior Home Commerce and has five stores on the Romanian market, one in each of the towns Bucharest, Ploiesti, Buzau, Timisoara and Craiova.
Fabryo revises forecasts and expects stagnation
Fabryo, a paint and varnish manufacturer owned by the Swedish investment fund Oresa Ventures, predicts turnover similar that of 2009, namely RON 150m (€35.3m). After the first half of 2010, the manufacturer revised its initial forecast of a 10% increase.
The company hopes to reach a share of 24% of the paint and varnish retail market in 2010. In April and May 2010, Fabryo held a 21.8% market share. During the correspond-ing period of last year, the company had a 19.7% market share, according to the mar-ket research firm MEMRB. Fabryo expects a reduction of 15%-18% on the paint and var-nish market in Romania in 2010 in compari-son with last year.
KAI Ceramics expects increase in sales in Romania this year
The KAI Group, a Bulgarian manufacturer of ceramic tiles, which is owned by the American
investment fund Advent International, wish-es to invest €6m in order to expand its pro-duction capacity by 10%. The firm’s sales on the Romanian market reached 25% of the to-tal sales of the group in H1 2010, according to Ziarul Financiar, which was quoting com-pany managers.
KAI has two production units in Romania, about 140 km from Bucharest. They have a combined annual production capacity of 18 million m². The Romanian subsidiary of the group, KAI Ceramics Romania, expects its turnover to increase by 70% in 2010 in comparison with 2009, to €13.6m. Last year, the manufacturer achieved sales worth €8m on the Romanian market, with KAI Romania accounting for €2.7m. The remainder was sold directly in Romania from Bulgaria. KAI Ceramics entered the Romanian market last spring, with 20 product groups. The compa-ny now sells 50 in Romania.
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Construction output in Slovakia down by 6.6% in June
The decrease in construction output in Slovakia continues its slow down. In June it declined by 6.6% in comparison with the corresponding month of the previous year to €522.4m, according to data from the Statistics Office of the Slovak Republic (SUSR).
New construction, modernisation and re-construction saw a year-on-year reduction of 9.6% to €398.5m in June 2010. Repairs and maintenance increased by 16.1 % to €108.8m.
In terms of production specification, pro-duction realized in civil engineering de-creased by 0.4%, construction works on buildings by 6.6%. Construction of buildings represented 67.4% of the domestic construc-tion production and civil engineering works represented 32.6 %.
Increase in rental activity on the Bratislava office market in Q2 2010In the second quarter of 2010, only three of-fice projects were completed in Bratislava, two in the city centre and one in the suburbs. Their overall area came to 32,000 m², accord-ing to the Bratislava Research Forum (BRF), which consists of the property consultancies Cushman & Wakefield, CB Richard Ellis and Colliers International in Slovakia. The larg-est completed project during the period in question was River Park on the banks of the Danube, which added about 29,000 m² to the city office stock.
At the end of June 2010, the total stock of office space in Bratislava was 1.37m m², according to the BRF. Between April and June 2010, leases involving approximate-ly 47,000 m² of office space were conclud-ed, almost three times the amount of the equivalent period last year. In total, an area of approximately 70,000 m² of office space was rented in Bratislava during H1 2010. In the second quarter of this year, the banking and financing industry rented the most sub-stantial amount of office space (11,900 m²), and were followed by professional servic-
es (10,450 m²) and industry and construc-tion (8,400 m²). The most prevalent kind of transactions remained leases of up to 500 m², which accounted, in Q2 2010, for about 61% of total rented space. The vacancy rate on the Bratislava office market was reduced to 13.6% in Q2 2010 from 14.2% during previous quar-ters. The lowest vacancy rate in Q2 this year, 9.9%, was that of the Petrzalka district.
Iuris to build family house complex in Piestany
The property developer Iuris has announced plans to build a multipurpose complex in the town of Piestany. The first stage of this project is the construction of a residential complex called Beethoven, according to a report in Trend. The complex will stand on a site tak-ing up more than 15 ha and offering 172 fam-ily houses. The first stage of construction, due to begin in full in the summer of 2011, will consist of the division and distribution of land and the construction of infrastructure. The former is expected to be completed in 2012. Then construction of houses will begin as part of the same first stage. During the sec-ond stage of the project, the developer plans to build a leisure area taking up approximate-ly 30 ha. It is now working on a feasibility study pertaining to the second stage of this project. The developer’s representatives have said that talks with hotel operators which might have an interest in building accommo-
dation facilities in this area will follow. The current plans for this area include the con-struction of two hotels, one three star and one four star, with a total combined capac-ity of 250 rooms and 50 apartments. Other structures due to be built here include an aq-uapark and sports facilities.
Doprastav expecting fewer redundancies than initially fearedDoprastav, the most prominent Slovak con-struction firm in terms of sales, does not, as it had thought, need to make 750 employees of its 3,000-strong staff redundant. The decision to cut the workforce will depend on whether work on the public-private partnership (PPP) project involving the construction of the D1 motorway between Martin and Presov starts in the near future.
Along with the Zilina-based Vahostav-SK, Doprastav is part of the consortium charged last year by the Slovak transport ministry with the construction of this part of the motor-way, which is 75 km long. Doprastav’s man-agement is now compiling lists of staff who might be laid off, according to the SITA news agency, quoting the company. About 150 people will be made redundant by September 2010. For all of the others, there is sufficient work until October 2010.
The cost of the construction of the D1 mo-torway, as determined in the PPP package, is €2.4bn, without VAT. The Doprastav and Vahostav-SK consortium offered a bid of €3.3bn in the tender but later increased this to €4bn. The Slovak government, in accordance with the same conditions in the PPP package, promised to repay the investment within 30 years. In to-tal, this would mean a bill of €9.1bn.
Slovakia
www.pmrpublications.comSource: INNSE, 2010
Construction output growth in Slovakia (%, y-o-y),January 2009-June 2010
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Nitra launches tender for road construction project
The Nitra region has announced a tender for the modernisation of three sections of class II and III roads in the town of Nove Zamky. The total length of these roads is 31 km, accord-ing to the SITA news agency. The forecast cost of the work, which is expected to last for one year, is €4.4m exclusive of VAT. The sections due to be modernised include Nove Zamky-Andovce-Zemne-Komoca (17.4 km), Salka-Bajtava-Kamenica nad Hronom (9.2 km) and Pozba-Bardonovo (4.5 km). The money to be invested in the project is to come from EU funds, the state budget and the regional budget. Bids will be accepted until 30 August 2010. The decisive criterion in the selection of the general contractor will be price, ac-cording to representatives of the region.
PPP package 1 unlikely to be concluded before the end of August 2010The conclusion of the agreement on the fund-ing of PPP package number 1, which involves the construction of the D1 motorway between Martin and Presov is unlikely to take place before the end of August 2010, according to Dusan Samudovsky, the general director of Doprastav, the largest Slovak construction firm. He informed the SITA news agency that this problem is to be decided solely by the European Commission after it has made sure that the construction of the motorway does not affect the environment surrounding the planned Turany-Hubova section of the motorway. The new deadline for the conclu-sion of this matter, set by the Slovak ministry of transport is 31 August 2010.
The project has been delayed numerous times since 2009. The European Investment Bank (the EIB) pledged a loan of €1bn for his project but it cannot release the funds before the EC has approved it.
Eurovia to rebuild damaged roads in Minovce
The construction company Eurovia SK Kosice has been chosen to rebuild the sec-tions of class I road damaged by the floods in Minovce. The project is worth €2.95m ex-clusive of VAT, according to the Slovak Road Administration (SSC), which commissioned
Eurovia after direct negotiations. The SSC did not organise a public tender because the roads were in urgent need of repair.
In total, the project includes the repair of approximately 200m of carriageway between Breznica and Minovce destroyed in the latest floods in Slovakia this year.
Renovation of Liptovsky Hradok city centre begins
The reconstruction of the city centre in Liptovsky Hradok, in northern Slovakia, in-cluding the that of the main square, began in early August 2010, according to Stavebne Forum. The project is worth €1.74m and covers the repair of buildings, the construc-tion of fountains and public parks and the reconstruction of road infrastructure and stairways, according to Branislav Treger, the town’s mayor. The project is funded in full by the EU and is due to be completed in April 2011.
Family homes to grow in Svaty Jur
The investor Thorin plans to start works next year on preparing the infrastructure for the construction of some 25 family homes in the town of Svaty Jur near Bratislava. The hous-es will have garages and gardens, in all on an area of 30 ha. The land parcels are sized between 732 m² and 1,226 m². The average price of the parcels will be €203/m², VAT in-cluded, Trend reported. The works on the land infrastructure are expected to be com-pleted in the autumn of 2012 at the earliest, according to information from Thorin’s man-agement. A total of 11 parcels have been sold already. At the moment, Thorin is in talks to select the constructor that will carry out the infrastructure project.
OTP Real plans a residential complex in Bratislava
The developer OTP Real Slovensko, a sis-ter company of the OTP Bank in Slovakia, plans to soon start the construction of the first phase of the residential project Start in the Bratislava district of Dubravka. The en-tire project is envisaged to consist of 182 flats in the small apartment segment, with floor
areas of 41-80 m². The flats will cost between €1,690 and €1,900 per m2, VAT included.
In the first phase, a total of 48 flats is to be erected. The construction of this phase of the project is planned to start in the com-ing months and to be finished by the end of 2011, according to representatives of OTP Real Slovensko as quoted by Trend. The de-veloper would not elaborate on the timeta-ble for the entire project. At the ground floor of the blocks of flats, the developer plans to build four retail premises of between 25 m² and 65 m², which it will sell for an average price of €1,700/m². OTP Real has been oper-ating in Slovakia for a few years.
Besides building office complexes for OTP Bank throughout the country, the firm has also completed its own residential projects in towns such as Dunajska Streda and Banska Bystrica.
Comenius university plans a new campus in Bratislava
A new campus, to consist of more than 400 rooms for some 1,400 students, is to be built by the Comenius University in the area Mlynska dolina in Bratislava. The complex will have a total floor area of 37,000 m², Trend reported. The decision to build a new campus was made to remedy a shortage in student ac-commodations in the Slovak capital.
The new campus, expected to cost up to €38.4m, is to consist of three 14-floor towers plus regular and underground parking with a total of 220 spaces. The construction works on the campus are commence this year to be completed within a year.
Holiday Inn to launch in September in Trnava
The four-star hotel Holiday Inn in the town of Trnava is expected to open its gates on 1 September 2010, the newswire SITA report-ed. In addition to 102 rooms, the hotel will offer several conference facilities with differ-ent capacities, ranging from 150 to 800 per-sons. The hotel is being erected in downtown Trnava. The ambition of the owners is for the hotel to become a hub for conference tour-ism in western Slovakia. The hotel will op-erate under the name Panorama Sporthotel. Holiday Inn has a hotel with large conference facilities in Zilina as well.
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Slovak Ministry plans to build an intermodal freight terminal
The Slovak ministry of transport, post and telecommunications (MDPT) announced plans to build a public intermodal freight terminal in the town of Leopoldov, north of Trnava, the newswire SITA reported. The project is worth €41.95m, without VAT.
The construction of the first phase of the project is planned to start in Q4 2012 to be completed a year later. The construction of the second phase of the terminal is to start once the first phase is at full capacity, which is predicted to happen within 30 years.
YIT buys majority stake in Reding
The Slovak construction company Reding has gained a majority shareholder in the Finnish firm YIT Corporation, which purchased 70% of the Slovak constructor, Hospodarske Noviny reported. Reding has been operat-ing in the construction sector in Slovakia for 13 year, specialising mostly in residen-tial and commercial projects. The stake was purchased from the Slovak entrepreneur Ladislav Versovsky, who has retained a 30% interest and will remain at the helm of the company as board chairman as well as gen-eral director. The deal has yet to be approved
by the Slovak antitrust office. The purchase is part of YIT’s strategy of expansion in Central and Eastern Europe.
Reding operates mostly in the Bratislava area. Its annual sales hover around €30m. The company employs some 150 people. YIT is the biggest Finnish construction company by revenues. Abroad, it is the largest construc-tor on the residential segment in Russia and has a dominant position in the construction markets of the Baltic states; two years ago, the company entered the Czech market.
Skanska could cut jobs due to order slag
For now the Bratislava-based construction company Skanska SK does not plan to sack staff like other major constructors in the country, such as Doprastav and Vahostav-SK Zilina, the newswire SITA reported. According to Skanska’s general director Tibor Kocvara, Skanska will have to start to lay off workers if it continues not to secure orders as has been the case in the past sever-al months. Kocvara, however, would not say exactly how many months of no wins would prompt the company to let go of some of its 900 employees.
Skanska in Slovakia is in a process of a legal review of all tenders in which it lost. In cas-es where the rationale for it failing could be
challenged under law, Skanska’s management plans to take its concerns to court.
Skanska still eyes the D3 Strazov-Brodno section-to-be
The Bratislava-based constructor Skanska SK still has interest in the order for the construc-tion of the 4 km-long D3 motorway section between Strazov and Brodno, according to the firm’s general director Tibor Kocvara, as quoted by the newswire SITA. Skanska’s law-yers argue that there was no reason to cancel the construction tender for this project.
The National Motorway Company (NDS) in Slovakia, which handles road infrastruc-ture construction in the country, planned to launch a new tender for this project in August 2010. But it has yet to make any re-lated announcement. In June 2010 Skanska lodged a complaint with the municipal court in Bratislava to challenge the decision of the Office for Public Procurement (UVO), which ordered the tender be cancelled in spring 2010. UVO argued that the NDS breached the law on public procurement during the tender.
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