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View toward Dubrovnik, Croatia, north toward the site (not visible) of the construction of the Pelješac Bridge. Photo by Jocelyn Erskine-Kellie available at Flickr.com under Creative Commons license

08:00 pm | 18. July 2019

Connecting a Country, Dividing Opinion

Both China and Croatia have insisted that the choice of state-owned China Bridge and Road to take on construction of the Pelješac Bridge was made through a fair and open bidding process. But the messaging from both countries only encourages suspicion that other factors are at play.

 

By David Bandurski

Construction of the Pelješac Bridge, a long-awaited project connecting the southernmost Croatian county of Dubrovnik-Neretva with the northern Croatian mainland over the Bay of Mali Ston in the Adriatic Sea, is well under way. Back in March, Total Croatia News reported that the last of the 146 steel piles for the bridge’s foundation — sourced in China — were due to arrive onsite by the middle of April. China’s official Xinhua News Agency reported, meanwhile, that the piles were being driven into the seabed by “the biggest pile driving barge in the world,” a vessel called Xiong Cheng 1. 

Alongside this major construction project, another project was underway in April in the historic town of Dubrovnik: the hosting by Croatia of the 8th Summit of the China-led format China-CEEC Cooperation, referred to generally as “16+1, ” an initiative launched in 2012 with the aim of advancing cooperation with 11 EU member states and five Balkan countries. With the addition of Greece, the group has now become the “17+1.”

But anyone taking a serious look at the messaging from both the Chinese state and the Croatian leadership over the Pelješac Bridge and its momentous significance might easily assume that these two projects are closely related — and that is where the questions begin. 

A New Chapter

Construction of the bridge formally kicked off on July 31 last year, as the Chinese contractor chosen for the project, the China Road and Bridge Company (CRBC), exchanged project documents with the state-owned limited company Croatian Roads (Hrvatske Ceste).

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The start of construction began the next chapter of what has been a long and contentious saga over the bridge, which was first planned in 1997. Construction by a Croatian firm originally began in 2008, but the project came to a halt in 2012 amid concerns about cost and continued friction with neighboring Bosnia-Herzegovina, whose Neum corridor, a narrow outlet to the Adriatic coast, divides Dubrovnik-Neretva from the rest of Croatia. If construction is completed within the designated 36-month time-frame for the contract, the 2.4 kilometer long bridge will be the second largest in Europe, carrying four lanes of traffic. 

The total cost of the project is 420 million euros, or around 510 million U.S. dollars. Of this total, 85 percent, or 357 million euros, will be provided by cohesion funds from the European Union, which are intended to “reduce economic and social disparities and to promote sustainable development” by assisting EU member states whose Gross National Income (GNI) per inhabitant is less than 90 percent of the EU average. Croatia itself will provide the remaining 15 percent.

In an EU press release announcing the decision to approve financing in July 2017, Corina Creţu, a Romanian politician who serves as European Commissioner for Regional Policy, emphasized the project’s power to connect. “This project genuinely embodies our commitment to removing barriers, uniting territories and bringing people together,” she said. “I know how much this bridge is awaited by the Croatian people and I am glad that the EU, with its funds, can be a part of this new chapter in the history of the country.” 

But the Pelješac Bridge quickly divided opinion when it was announced in January 2018 that the contract for the project had been awarded to CRBC, a state-owned Chinese contractor. The issue was not that the contractor was Chinese -- the process, after all, was open to all bidders -- but whether the bid had been enabled by state support from China. 

Two of the competing bidders, Strabag of Austria and Astaldi of Italy, filed complaints with the State Commission for Supervision of Public Procurement Procedures (DKOM), the body created under Croatia’s Public Procurement Act (PPA) of 2012, which met EU directives and procedures on public procurement as a condition for the country’s accession to the trade body. Strabag and Astaldi alleged that the extremely low CRBC bid — approximately 20 percent below their own bids — was possible only if supported by Chinese state aid, in contravention of European competition laws.

China’s ambassador to Croatia, Hu Zhaoming (胡兆明), called the allegations of foul play “unfounded.” The appeals were rejected in March 2018 by DKOM, which found that Croatian Roads had not violated public procurement procedures. DKOM chairman Goran Matešić said that there was “still a possibility for an administrative action,” but that construction work would proceed.

More recently, China’s official Xinhua News Agency noted in August last year that the signing ceremony for the contract had gone ahead in April “despite disturbance from competitors who tried several times to question Croatia’s decision unsuccessfully.”

EU Cohesion Funding for Sino-Croatian Ties?

Despite the fact that the bulk of the funds for the Pelješac Bridge come from the EU, the project has continued to play a clear role in messaging — both from China and from Croatia — about both the deepening of the bilateral relationship and signature Chinese foreign policy programs like the Belt and Road Initiative (BRI) and China-CEEC Cooperation, the now “17+1.” The 16+1 platform, which predates BRI, is now regarded as a key component of BRI, or, as scholars from an official Chinese think tank called it last year, “an important leg of the BRI.”

The framing of the Pelješac Bridge as a bilateral milestone is awkward, to say the least, against the backdrop of growing unease in the EU over China’s geopolitical ambitions, and fears that it might be seeking to divide Europe at the policy level. Italy unleashed a new wave of concern in March as it announced it would become the first G7 nation to sign up to BRI, and an EU-China strategic outlook paper from Strasbourg on March 12 noted that “there is a growing appreciation in Europe that the balance of challenges and opportunities presented by China has shifted.” 

Surely, the Pelješac Bridge, which is 85 percent supported with cohesion funding from the European Union, the rest coming from Croatia itself, cannot be misconstrued as a part of China’s Belt and Road Initiative?

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A July 2018 press release from the Government of the Republic of Croatia calls the Pelješac Bridge a “synthesis” of the idea behind China’s 16+1 platform.

The framing of the Pelješac Bridge as a bilateral milestone is awkward, to say the least, against the backdrop of growing unease in the EU over China’s geopolitical ambitions, and fears that it might be seeking to divide Europe at the policy level.

 
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Croatian President Andrej Plenković. Photo by Arno Mikkor (EU2017EE), available at Flickr.com under Creative Commons license.

But this is where the waters get muddy. During a news conference held in Sofia, Bulgaria, during the last China-CEEC Summit in early July 2018, attended by Chinese Premier Li Keqiang (李克强), Croatian Prime Minister Andrej Plenković said that the building of the Pelješac Bridge “is a synthesis of the idea behind the 16+1 initiative of eastern and central European countries and China. 

Plenković said, moreover, even as he tried to strike a reassuring tone on the importance of compliance with public procurement rules, that the awarding of the contract to a Chinese company had “definitely contributed to the decision to choose Croatia as the host” of the 2019 summit of the 16+1, the meeting hosted in Dubrovnik this month.

Subject to EU procurement rules, the decision over the Pelješac Bridge should be free of political considerations, and not a matter at all of Sino-Croatian foreign policy. But Plenković insisted on characterizing the EU-funded project as an important milestone in Croatia’s relationship with China, foretelling further benefits to come:

I believe that in foreign policy terms it is an important achievement that will improve our position in efforts to develop relations with China. I think that, after signing of the agreement on Peljesac Bridge, additional conditions have been created for cooperation in various sectors.

Both China’s diplomatic language and state media coverage on the Pelješac Bridge project have likewise stressed that it is a milestone in relations with Croatia. 

During a speech at the signing ceremony for the construction contract back in April 2018, Hu Zhaoming, the Chinese ambassador, said that “we are now witnessing a special time for Sino-Croatian relations.”

I say special not just because the Pelješac Bridge is the largest project of cooperation between China and Croatia in history, but even more because we have opened a new chapter in our bilateral relationship.

The political relationship between China and Croatia has opened a new chapter. Last year, both countries celebrated the 25th anniversary of the establishment of diplomatic relations, and from this year Sino-Croatian relations enter their second period of 25 years. The bridge project not only demonstrates steadily growing political trust between China and Croatia, but even more sets down a firm foundation for elevating the strategic level of the bilateral relationship.

The language on both sides could, of course, be dismissed as mere rhetoric. But the suggestion of conditionality in statements like those above only fuels the question of how the decision to award the Pelješac Bridge contract to the state-owned CRBC can be construed as a matter of “growing political trust” at all when China and Croatia alike insist political considerations did not enter into the matter. 

18. July 2019
Author
David Bandurski

An expert on Chinese journalism and communication, Mr. Bandurski is currently a part-time researcher at the Institute of China Studies at the University of Heidelberg. He is also co-director of the China Media Project, dividing his time between Germany and Hong Kong. Mr. Bandurski’s books include Dragons in Diamond Village (Penguin/Melville House), a work of reportage about urban development in China, and Investigative Journalism in China (Hong Kong University Press).