Polish roads lobby accuses Chinese of dumping

(WARSAW) - Poland's motorway constructors have levelled claims of unfair competition against a Chinese group which cracked their country's highways market, a letter obtained by AFP on Tuesday said.

"We note that the bid by the Chinese consortium is based on a price far below the value of the tender, which constitutes unfair competition," the constructors' lobby group, the OIGD, said in a letter to European Commission chief Jose Manuel Barroso.

The letter -- sent to Barroso because the commission polices competition rules across the 27-nation European Union -- alleged that Beijing was helping Chinese firms skew foreign markets.

The OIGD urged the commission to take anti-dumping measures against the China Overseas Engineering Group Company (COVEC)

In September, COVEC beat several European competitors in the race to build 49 kilometres (30 miles) of the A2 highway linking the Polish and German capitals, Warsaw and Berlin.

The construction is part of Poland's ongoing issuing of tenders as it drives to upgrade its infrastructure in time to co-host the 2012 European football championships.

COVEC was chosen by Poland's state roads and highways company -- and experts from Europe's construction and public works lobby said the deal was unprecedented in the EU.

In its letter, the OIGD noted that COVEC's bid was 1.3 billion zloty (319 million euros, 456 billion dollars).

"That was 48 percent less than the estimated cost of the tender. It was also 23 percent less than the second-lowest bid," it said, and claimed the Chinese government would simply cover COVEC's losses.

The OIGD insisted that it was "unacceptable to allow firms from outside the EU that take advantage of subsidies from their nations to compete with firms in the single market".

Ex-communist Poland, a relatively large central European country of 38 million people that joined the EU in 2004, has a transport network which needs massive upgrading to bring it up to the standards of its Western neighbours.

The poor state of the infrastructure is a legacy of underinvestment during five decades of communism and of a failure to get enough road projects underway since the fall of the old regime in 1989.

By 2012, it hopes to have opened a total of 1,800 kilometres (1,116 miles) of multi-line highway. So far, about half has been built.

Warsaw's highway development plan for 2008-2012 is worth 27.5 billion euros (39.5 billion dollars), of which close to a third is covered by EU funding for the bloc's less well-off member states.