A senior executive of a state-owned Chinese engineering company has been dismissed for failing to fulfil contract conditions with the Polish government, business news portal Caixin Online reported yesterday.
Fang Yuanming, general manager of China Overseas Engineering Group (Covec), has been removed from his position after Poland's highways authority cancelled an agreement with a consortium led by Covec after it stopped construction halfway through the job. It cited financial difficulties.
China's State-owned Assets Supervision and Administration Commission, the top agency overseeing state-owned companies, asked an organisation to audit the company two weeks ago, Caixin reported.
The General Directorate for National Roads and Motorways of Poland terminated the contract on June 13 because of construction delays. It said on its website that it expected to find a new contractor by the end of this month.
The agency is also demanding 741 million zlotys (HK$2.07 billion) in damages from Covec, according to Caixin.
Covec established a consortium with Shanghai Construction (Group) General Co and China Railway Tunnel Group and a Polish company to compete for a major road project to link Warsaw with the German border. The consortium won the contract to build the A and C sections of the A2 motorway between Warsaw and Lodz after offering a bid that was less than half the Polish government's budget for the project in September 2009.
Construction began in June last year but by this May, over a third of the way through the agreed construction period, less than 20 per cent of both sections of the road had been built, as funds were running low.