Pelješac Brigde in Croatia
© European Union

Co-financed by the EU and built by China: Croatia’s new bridge

The Pelješac Bridge, one of the largest EU-funded projects, was inaugurated in Croatia in July 2022. The EU contributed EUR 357 million to the project, as well as a loan from the European Investment Bank. Following the revelation that the Chinese contractor may have violated workers’ rights, we asked the Spokesperson’s Service of the EU Commission for information regarding the matter.

Connecting the southernmost part of Croatia and Dubrovnik with the rest of the Croatian mainland and spanning the bay of Male Ston across the Adriatic Sea, the Pelješac Bridge is a massive infrastructure project. The bridge provides a quicker way to get from Dubrovnik to Split and vice versa. Up until now, this was only possible by land. Croatian citizens had to cross the border with Bosnia-Herzegovina and leave the territory of the EU. This involved people and customs controls, which were particularly disruptive for transit traffic. Since 26 July 2022, traffic is running much more smoothly and, on top of this, the region is expected to see an economic upswing.

Chinese construction in Europe

The contract to build the Pelješac Bridge went to a Chinese state-owned company. The company had beaten its competitors: as well as offering a much better construction price, it also quoted a construction time that was 6 months shorter than the competition. Before the tender, the EU Commission had checked Croatia’s project application for EU co-funding of the Pelješac Bridge to ensure that all requirements and procedural steps under the Cohesion Policy Regulations had been complied with. So far, so good.

However, the ZDF report on the opening of the bridge subsequently revealed allegations that China had violated workers’ rights. According to the allegations, workers had not been paid the local wage and had not been allowed to leave their accommodation. The European Academy decided to look into the matter and approached the EU Commission.

Information provided by the EU Commission

In response to the Academy’s query, the Spokesperson’s Service of the EU Commission replied as follows: “Based on a procedure that complies with the principles of transparency, equal treatment and non-discrimination, contracts are awarded to the bid that offers the best value for money. To ensure that these principles are applicable on a level playing field, we also take legislative action at the EU level. The Foreign Subsidies Regulation agreed by the co-legislators at the end of June will allow the Commission to investigate the situation of economic operators receiving foreign subsidies from third countries and prevent them from distorting competition for public contracts in the EU.”

Under EU law, companies and state-owned enterprises from non-EU countries may be awarded contracts through the European Structural and Investment Funds. However, this is not always the case in reverse. China, for instance, is among the countries that do not allow European companies to bid as contractors for construction projects in China.

However, the EU Commission is working to change this to ensure that EU companies get reciprocal access. According to the Spokesperson’s Service of the EU Commission, “this objective is to be achieved through an expansion of the WTO Government Procurement Agreement and through bilateral trade agreements. The revised proposal for an international procurement instrument presented by the Commission in 2016 aims to contribute to the opening of markets and to equal competition. It would allow the Commission to take action in cases of alleged discrimination against EU companies in procurement markets. The EU supports Chinese efforts to join the WTO Government Procurement Agreement, which would ensure reciprocal market access.”

Whether workers’ rights were actually violated during the construction process has not been conclusively established.

Diane Schöppe

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