Transaction Advisory Services: Tendering and Contracting of the Civil Works Contract for the Rreshen – Kalimash Motorway

Country: Albania
Client: General Roads Directorate, Ministry of Public Works, Transport and Telecommunications
Period: July 2006 – November 2006

The Government of Albania decided to construct the Rreshen – Kalimash Motorway, a new 50 km dual carriageway including a 6 km tunnel, which is part of the Durres – Morine Corridor. The project with an estimated cost of USD 400 – 600 million is one of the largest infrastructure projects ever undertaken in Albania and is a critical element in the ambition to connect the Kosovo region with the Port of Durres for the purpose of freight transport and the shores of Albania for tourism purposes.

The project was to be mobilised in order to start construction before the winter and have the Project completed no later than June 2009 before the beginning of the respective tourism season.

In addition, the Government of Albania decided to have the project constructed as soon as possible in order to capture the economic benefits of the project.

ECORYS was retained in July 2006 with the request to design a tender and contracting strategy in accordance with internally accepted principles of fair and transparent competitive bidding procedures. Moreover, ECORYS was asked to support all negotiations that would lead to a contract or at least lead to a notice to proceed no later than September 2006. The objective was constrained by the absence of a detailed design for the Works which had to be procured.

ECORYS recommended a Qualifications Based Selection Procedure, where an independent Evaluation Committee composed on international seasoned experts selects the best candidate. This procedure is followed by an Invitation to this candidate to submit a Target Cost Estimate based on Unit Prices. Four consortia expressed interest and the UK based Bechtel-ENKA joint venture was invited to tender. To ensure fair pricing, the proposed unit prices were extensively reviewed and verified by the Slovenian Engineering firm DDC as such subcontracted by ECORYS. In September 2006, a contract was negotiated.