* Six states send letter to Polish deputy prime minister
* EU contractors owed billions of euros on road contracts
* Poland says the construction firms are at fault
By Christian Lowe
WARSAW, June 17 Six European Union states have
asked Poland to explain why it is not paying billions of euros
that foreign construction firms say they are owed for work
carried out under an EU-backed road-building programme.
Poland's state roads agency says it is the contractors that
are at fault, but the dispute risks harming Warsaw's reputation
in Brussels, which is pumping huge sums of development cash into
Polish roads and railways.
Reuters has obtained a copy of a letter about the row signed
by the ambassadors of Austria, France, Germany, Ireland, the
Netherlands and Portugal. It was addressed to Polish Deputy
Prime Minister and Economy Minister Janusz Piechocinski.
It was the first time the EU governments had formally joined
forces in the dispute, so the joint letter will raise the
diplomatic pressure on Warsaw.
The letter said the unpaid money pointed to fundamental and
systemic problems in the way Poland manages big civil
"This phenomenon seems to have reached a level which
indicates that support from the Polish government might be
helpful in order to avoid negative implications to the image of
Poland's business environment," it said.
The value of claims against the roads agency lodged with
Polish courts stands at about 10 billion zlotys ($3.15 billion),
according to the letter, which called the sum "unusual and
unprecedented". It asked Piechocinski to look into the matter.
The Economy Ministry declined to comment.
Firms that have been in dispute with the Polish road agency
over payments include Austria's Strabag and Alpine
Bau, a unit of Germany's Bilfinger, Ireland's SIAC,
SISK and Roadbridge, and a unit of Spain's Ferrovial.
Poland is undertaking a massive programme, part-funded by
the EU, to build a modern motorway network to replace the narrow
and dangerous roads left after decades of Communist rule.
Contractors allege that the state roads agency, GDDKiA, has
not paid them for stretches of motorway, even though the work
has been completed.
They say the agency cashed in bonds without any
justification that had been lodged by contractors as a guarantee
they would complete their work.
GDDKiA managers dispute that account. They say the most
common reason for payment delays is that contractors' work has
fallen below agreed standards. GDDKiA said it had been forced to
terminate some contracts because of failures by contractors.
Late last year, the EU executive, the European Commission,
asked the Polish government to explain what had happened with
the disputed contracts. The Commission has not yet revealed the
outcome of that request.
($1 = 3.1707 Polish zlotys)
(Additional reporting by Pawel Sobczak and Chris Borowski;
Editing by Kevin Liffey)