Bechtel was inactive in Romania last year, considering the building contract of the Transylvania Highway, the only one it had in this country was terminated by the government in May 2013. It had not made any progress with the highway in the first five months of last year, according to the data previously supplied by Romania’s company in charge of highways and national roads CNADNR.
The two companies, Bechtel International Inc SRL and Enka Construction and Development are among the 30 most profitable in Romania in 2013 and also among the most profitable builders on the local market last year, beating companies with extensive infrastructure projects such as Italy’s Astaldi and Austria’s Strabag, according to the Trade Registry data.
According Enka’s website, the company does not have any more construction projects in Romania.
The contract with US’ Bechtel, signed more than a decade ago, which would have had the company build 415 kilometers of Transylvania Highway is regarded as one of the worst ever signed by the Romanian government. Bechtel collected EUR1.4 billion for 52 kilometers of highway only, which it completed, with another 64 kilometers are only half done on the Suplacu de Barcau-Bors section. Moreover, when it terminated the contract, the Romanian government pledged to pay the US company another EUR37.2 million as compensation.
So far, no one has been held liable for having Romania pay EUR1.4 billion for merely 52 kilometers of highway or EUR27 million per kilometer. Furthermore, the original contract signed while the Nastase Cabinet was in office has since vanished. The latest official statement about the contract was made by Transport Minister Dan Sova at the beginning of April, who said the Prosecutor’s Office had been looking for the document “for about six months”.
Each of the two companies, Bechtel International Inc SRL and Enka Construction Development posted total profits of about EUR142 million in the last five years (2009-2013), according to ZF’s calculations based on Finance Ministry data. Bechtel International Inc SRL posted EUR289 million revenue, while Enka Construction and Development posted EUR321 million revenue in the five years. The US-held company saw an about 93% profit margin, while the Turkish-held company’s profit margin stood at 83%, according to ZF’s calculations.
Enka Construction and Development had only two employees in 2013, after the number thereof had been low in previous years, as well, three to four people at best. On the other hand, Bechtel had almost 2,400 employees in 2009, while last year’s headcount was merely 81 on average, according to Finance Ministry data.
The Finance Ministry data show the two companies split the funds from the Romanian government almost equally.
When asked for comment on the more than EUR55 million profit in an inactive year, Bechtel replied, “Bechtel provides the appropriate financial information to the government. However, as a private company we do not publicly discuss financial matters.”
Enka did not answer ZF’s calls for comment by press time. CNADNR did not reply, either, to ZF’s question about how much it paid to the two companies last year.
CNADNR paid about EUR268 million for the half-finished 64 kilometer Suplacu de Barcau-Bors highway section of the total EUR527 million contract signed with Bechtel, according to the latest information available.
(English version by Loredana Fratila-Cristescu)