China Overseas Engineering Group (COVEC) is withdrawing from the USD447 million highway construction project in Poland after incurring heavy losses. COVEC said the actual cost of the A2 highway project has far exceeded its expectations, reaching USD786 million, 76% higher than the original estimate, as its Polish partner imposed a higher construction standard and the price of building materials soared unexpectedly. The Polish road authorities had already said they had canceled the contract. COVEC has invested more than USD140 million in the project since it began in July last year, and has finished nearly 20% of the construction. Polish Prime Minister Donald Tusk has pledged to complete the highway before the 2012 European Football Championships, which Poland is co-hosting with Ukraine. The road connects the German border to Warsaw. The Polish road agency is demanding compensation of USD271.1 million from COVEC, which is also claiming compensation from its Polish partner. “Chinese enterprises should try to become familiar with international law and the market environment in foreign countries when expanding abroad,” said Zhang Xiang, a spokeswoman for the China International Contractors Association.