Serbia may halve $1 bln China road contract after price row -report

BELGRADE, July 1 Mon Jul 1, 2013 7:13am EDT

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BELGRADE, July 1 (Reuters) - Serbia may take away part of a billion-dollar road-building contract from China's state-owned CRBC International Co which, it says, wants to put up the price by 150 million euros ($200 million), a Serbian newspaper reported on Monday.

Serbia secured a 15-year, 850-million-euro ($1.1 billion) loan from China last year to build 200 km (124 miles) of road connecting to the E75 pan-European highway which runs from northern Norway to the southern Greek island of Crete. China Road and Bridge Corporation (CRBC) is the main contractor.

Serbian Regional Development Minister Verica Kalanovic told the Vecernje Novosti daily that CRBC wanted 150 million euros more for a 109-km stretch of the road in central Serbia.

"That (increase) would be a direct violation of the contract that stipulated construction costs of 492 million euros, and the highway would be more expensive than standards set by Serbian experts," Kalanovic was quoted as saying.

Kalanovic said she would not agree to such a price hike and that Serbia may seek another contractor, the report said.

The minister could not reached by Reuters for comment.

Under a deal signed with a previous government, CRBC is also building a 170-million-euro bridge over the river Danube to connect Belgrade's municipalities of Zemun and Borca, part of a growing number of infrastructure and energy projects involving Chinese firms in the Balkans.

Last week, the Serbian government said China's Ex-Im bank had approved the release of a $334-million loan for two local sections of the pan-European road, Corridor X, which runs between Salzburg in Austria and Thessaloniki in Greece. ($1 = 0.7693 euros) (Reporting by Aleksandar Vasovic; Editing by Louise Ireland)

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