Position of Trakcja PRKiI S.A. on the Contract for the Expansion of Provincial Road No. 548 on the Stolno- Wąbrzeźno Section

1. The Company is of the opinion that the contract concluded on 19.04.2017 remains in force and continues to be binding on the Parties.
2. Trakcja PRKiI S.A. is of the opinion that continuing the works on the basis of the aforementioned contract is the most advantageous solution from the point of view of the management of public funds, and one that minimises the period of inconvenience for drivers and residents occurring during the works.
3. After the commencement of the contract, a number of problems came to light, which, if ignored by the Contractor, would have been unprofessional and, above all, disadvantageous for the Employer, given the outdated assumptions adopted for the execution of the works:
   a. traffic forecasts from 2007,
   b. documentation from 2010,
   c. building permit from 2012.
   
   Since that time, there has been a significant increase in traffic on the section in question, among other things as a result of the opening of the A1 motorway and facilities whose operation results in an increasing load on the roads. Uncritical execution of the works on the basis of the documentation provided would have resulted in a road not corresponding to current traffic parameters, faster deterioration and the need for constant repairs, and consequently the Employer’s challenging of the quality of the works performed during the warranty period.
4. After the tender was settled and the documentation was analysed, we found that the technical conditions specified in the documentation prepared by the Employer differed from those currently in force. This concerned, in particular, the WT-2 Technical Guidelines for mineral-asphalt mixtures and the catalogue of standard flexible and semi-rigid structures. Carrying out the works in accordance with the conditions received from the Employer would have meant breaching the regulations and would have provided grounds for challenging the completed works at the acceptance stage!
5. It became necessary to adapt the design to the currently applicable technical conditions, which the Contractor did and the Employer accepted. The design change resulted in an increase in the value of the works of approximately PLN 24 million. The lack of a decision on this matter is one of the reasons for the limitation of the works.
6. In 2018, the Contractor, in order to meet the Employer’s expectations and not wanting to bring about a suspension of the works and, consequently, a further extension of the completion time, carried out additional works with a total value of approximately PLN 6 million, which the Employer accepted and thereby confirmed the validity of their execution, but is now refusing to pay for.
7. Despite months of attempts to enter into talks with the Employer, including with the provincial authorities, on how to resolve the above problems, the Contractor did not receive any guidelines on this matter. Ultimately, due to the lack of a decision by the Employer, the Contractor, in accordance with the contractual provisions, was entitled to suspend the works.
8. On 5 April this year, the Company received a letter from the Employer – ZDW in Bydgoszcz – entitled “Withdrawal from the Contract”, which in our opinion is legally ineffective, since the basis for withdrawal is absolutely invalid. Moreover, in the course of the performance of the Contract, no circumstances arose entitling the Employer to withdraw from the contract, and there are certainly no grounds for withdrawal from the contract due to the Contractor’s fault.
9. In response to the above letter, on 16 April the Contractor sent the Employer explanations, addressing in detail all the allegations to which the Employer has not yet responded.
10. The Company expresses its readiness to immediately enter into talks aimed at determining the conditions for completing the contract and resuming the execution of the works.