BECHTEL TO GOA: DON'T OPEN THE DURRES-KUKES ROAD IN JUNE

UNCLAS SECTION 01 OF 02 TIRANA 000243 SIPDIS SENSITIVE DEPT FOR EUR/SCE J.ISMAIL TREASURY FOR V.ATUKORALA E.O. 12958:N/A TAGS: EFIN ECON PGOV AL SUBJECT: BECHTEL TO GOA: DON'T OPEN THE DURRES-KUKES ROAD IN JUNE ¶1. (SBU) SUMMARY: (Note: Please close-hold names and references to Bechtel executives. End note.) Mike Adams, President of Bechtel Civil, and Synon Tara, President of Bechtel's partner Anka in the Durres-Kukes road construction project, called on Prime Minister Berisha on April 16 to tell him they thought it was a bad idea to open the highway in June. Berisha has been flaunting the highway as one of his government's major successes and plans to open it with a gala ribbon cutting ceremony just days before the June 28 Parliamentary elections. While Bechtel believes they can open the highway to limited use, i.e. one-way guided traffic in some areas, the executives will try to convince the PM that opening the highway before October, when both carriageways should be complete, will add to the cost of the highway, delay final completion, and possibly compromise safety. In addition, they are concerned that the inevitable backups this summer, as Kosovar tourists use the unfinished highway to get to beach resorts, will result in bad publicity. End summary. ¶2. (SBU) Bechtel Vice President of Infrastructure Carl Strock told econoff on April 16 that he and his boss Mike Adams (President, Bechtel Civil) are in Tirana for a meeting with Prime Minister Berisha. Synon Tara, president of Bechtel's Turkish partner in the road project Anka will also participate. They will try to convince Berisha that the road should not be opened until October, when both carriageways should be completed. Strock cited the following reasons to delay opening: -- The "north bore" of the tunnel will not have a "hole through" (drilling teams from opposite sides meet for the first time) until May 22, behind schedule due to unforeseen construction difficulties. -- Several bridges will need bypasses until they can be redesigned and rebuilt, also due to unforeseen terrain problems. -- The GOA was supposed to issue a tender for a "tunnel operator" who would provide police, fire, escort and supervision support. The tender was delayed and is now expected to be issued May 19. The tunnel cannot be used without a responsible operator. -- Working on the highway while traffic is on it increases risk and cost and reduces construction efficiency. ¶3. (SBU) Strock said that Adams will tell Berisha that Bechtel expects a continuous ribbon of asphalt to be laid down by June 27, although traffic will have to be guided through the tunnel in one direction at a time and may also have to be guided around the bypasses. Bechtel could open the road under those conditions if Berisha insists, but would prefer not to for cost and safety reasons. Bechtel would be willing to operate the tunnel with GOA police and fire support until a permanent operator can be selected. ¶4. (SBU) Bechtel understands the pressure Berisha is under to open the road. Strock referred to Edi Rama's claim that Berisha had lied about completing the highway before elections and that it would be opened by a Socialist PM. However, Strock estimated that opening the highway in June would add at least 15 million euro to the cost versus opening it in October. Also, there could be bad press from the anticipated heavy traffic from Kosovo over the summer, which would be subject to considerable traffic delays on the uncompleted road. ¶5. (SBU) Strock said that the Director of Roads in the MOT, and probably Minister of Transport Olldashi himself, believes the opening should be delayed until October for safety reasons, but doesn't think anyone wants to take this message to the PM. Strock also thinks that the Director of Roads might find himself in legal trouble if he signed a contract addendum for additional cost and was later accused of authorizing unnecessary expenses to benefit Berisha's campaign. ¶6. (SBU) Strock estimated final completion sometime next spring or summer. Although the project will be very profitable for Bechtel, he said one of the reasons costs have escalated so much is that the original estimate for excavation was 7 million metric tons, which grew to 14 million by the time the contract was awarded and currently stands at 32 million metric tons. ¶7. (SBU) COMMENT: It is unfortunate that this highway, which will certainly bring economic development to villages along its right-of-way, attract traffic to Albania's ports and beaches, and TIRANA 00000243 002 OF 002 help the economies of Kosovo and Macedonia, has become such a political hot potato. During a visit to the construction site last fall, Berisha decided he wanted the tunnel lined along the entire length instead of the first and last 500 meters as originally planned, adding millions to the cost and delaying completion for the sake of appearance alone. Ironically, the GOA decided against spending additional money for safety fencing along the highway, allowing villagers and their livestock to share the road and bridges with vehicles travelling 120 km/hour. CRISTINA