Poland’s highway authority Monday canceled a contract with China Overseas Engineering Group Co (COVEC) for a stretch of 50-kilometer  highway connecting Warsaw and Berlin, which was the first major urban construction contract in the European Union to be won by a Chinese company.

Work on the highway was supposed to start earlier this year.

However, COVEC failed to pay its Polish contractors in time, causing a delay. As such, Poland will terminate the contract with COVEC, which faces a penalty of 200 million euros ($288 million) if it does not settle its outstanding bills before June 28.