Austria's Strabag Faces Problems in Securing Financing for Bosnian Motorway Project, Bosnia's Serb Republic Says

Strabag has contacted about 40 commercial banks, the European Bank for Reconstruction and Development (EBRD), and the European Investment Bank (EIB) and has found no support, the government said in a statement on its website.

EBRD has not agreed to finance the construction of the Banja Luka - Doboj section of the motorway because Strabag had been granted the concession on the project without a tender, whilst EIB has not came up with a final decision, leaving open the possibility to back the project if Strabag calls an international tender for the construction works.

The Banja Luka-Doboj section is part of an east-to-west motorway that would link Bosnia's border with Serbia with the western Bosnian town of Prijedor.

Bosnia’s Serb Republic and Strabag signed in May a deal to form a 10/90 joint venture company, which will build and operate a network of roads in the Republic. In November 2008 the Serb Republic government granted Strabag a 30-year concession worth some 3.0 billion euro ($4.1 billion) to build around 430 kilometres of motorways and high-speed roads in the Balkan country.

The Serb Republic is one of the two autonomous parts forming war-divided Bosnia. The other is the Muslim-Croat Federation.

($=0.6858 euro)