NEGOTIATIONS CONTINUE ON THE ISSUE OF ADDITIONAL DEMANDS

In its newest letter, in addition to its extra demand of 13 million Euros paid earlier without prejudice to later account, now BAMCO consortium formed by Vinci, Strabag and Hídépítő demands some 115 million Euros. This one and its other demands slowly make nearly the amount, for which the company has originally undertaken the construction of the tunnel, the TBM launching shaft and the station at Szent Gellért Square. For months DBR has been continuously negotiating with the consortium, continuously assessing the ever growing number of additional demands. Under another ultimatum BAMCO gave 30 days for the full completion, otherwise envisaged termination of its contract of 207 million Euros. According to the opinion of DBR this attitude, in addition to its being unethical and immoderately exaggerated, is likely scratching the limit of breach of contract.
BAMCO’s method and its step now are not new, as last summer the company already planned to suspend its works, provided its additional cost demands, exaggerated also, submitted to the Client were not fulfilled. For months DBR has been assessing the company's continuously increasing additional works claims, those with merit were paid, even the earlier disputed amount of 13 million Euros were transferred without prejudice to later account. But claims without merit will still not be fulfilled by DBR, not even upon the influence of ultimatums, during the negotiations DBR acts with strongly bearing in mind the interests of the city of Budapest and taxpayers. DBR is still open for negotiations within reasonable and acceptable frames, but BAMCO's attitude now is already exceeding all limits that are usual in business affairs.

Claims submitted now comprise several bigger items. Amid these there is such, merit of which is not disputed by DBR either, but the demanded amounts are immeasurably exaggerated and unacceptable even in international aspect. Among others such claim is one, under which BAMCO demands an amount of 66 million Euros for the delay of providing accessibility to the station at Fővám Square built from approximately 39 million Euros by its consortium partner, Hídépítő owned at that time still in 100% by Vinci, whereas TBMs are still only at the side of Buda. In comparison, an amount of 2 million Euros, which is by scales lower, is demanded for example for the delay of handover of work site at Szent Gellért Square and respectively for associated redesign and reprogramming.

For large scale projects it is usual that Contractors continuously submit additional costs claims. These are scrutinized by the Engineer’s company, and then the Client contemplates the submissions and accepts claims that have merit and reject those without merit (following this, parties may turn to the arbitration board and then to a chosen Court of Justice). However, the total amount of almost 190 additional cost claims submitted by BAMCO consortium is higher than the total amount submitted by all other, nearly 20 large Contractor companies together. In terms of business it is understandable that a contracted company would like to make the most possible profit on a given work, but understandably DBR Metro Project Directorate can accept such claims only, which stand for real performance or existing damage, and these are duly substantiated with sufficient documentation by the Contractor. Until the new negotiations are concluded, in protection of the interests of taxpayers, city of Budapest and BKV Zrt. and for retaining its negotiating position DBR does not want to give comments, but of course about the results the public will be informed immediately.

Budapest, 17th March 2009
DBR Metro Project Directorate