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Experience at a premium as EU focus shifts east


EUROPEAN CONTRACTORS are poised to cash in on massive infrastructure spending in countries joining the European Union in 2004.

Ten countries are joining: Poland, the Czech Republic, Slovakia, Slovenia, Latvia, Lithuania, Estonia and Hungary, from east Europe, and two Mediterranean islands, Malta and Cyprus. Accession is formalised in May and all will then be eligible for European funds to modernise infrastructure and government.

The accession countries have one third of the area and the population of Europe but only 5% of the income. There is a crucial need for development in water, rail and roads. Motorway links are mostly non-existent and even national roads require upgrading and repair on a wide scale.

A basic 21.75bn is allocated for the next three years, around half for Poland. Other relatively big recipients will be Hungary, the Czech Republic and Slovakia.

Most money is from the Structural Fund, set up in the 1980s to even up economic imbalance within the EU, and some from the smaller Cohesion Fund.

Cohesion money helps poorer countries avoid the deficits which big infrastructure projects can create. It goes mainly to Greece, Spain, Portugal and Ireland, but about one-third will now go east.

One major problem is the large 'experience gap' in the eastern European states of western contracts, time schedules and management.

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