Croatia: Extended deadline for bids submission for the TPP Plomin C construction, RWE remains co-owner?

, SEE Energy News

The deadline for bids submission for the power plant construction has been extended to the end of April 2014. Management of Croatia Power Utility Company decided to extend the deadline for the binding offers submission to the qualified bidders in the choice selection of strategic partner in the TPP Plomin C construction. The deadline for bids submission has expired at the end of this month, and has been extended until the end of April 2014. For HEP that means that they need to resolve urgently relations with RWE, which according the contract should remain the co- owner of the TPP Plomin 2 by the April 2015, after which the plant will be acquired by HEP.

HEP Board President, Tomislav Seric explained that the HEP decided this at the bidder request, and these were the consortiums led by KOSEP (South Korea), Marubeni (Japan) and Edison (Italy). “Bidders request to extend the period for binding offers submission is a good signal for us to perceive the bidder seriousness. HEP can benefit from that because we can count that we receive quality offers “, said Seric adding that in the variant of project financing (where neither the state nor the HEP give guarantees to the strategic partners) more bids may mean better prices achieving.In the HEP assume that a potential strategic partners want more time to prepare an in-depth analysis of the project and the environment. After binding offer submission, HEP will evaluate binding offer from a technical and financial point of view and choose the preferential partner with whom will negotiate. In the media has been speculated for some time that KOSEP and Edison gave up, so that only interested for the power plant construction was Marubeni. Asked what it would mean for HEP to arrive only one binding offer, Seric said that also in this case they would negotiate in order to achieve the best conditions for HEP. Project of TPP Plomin C construction is estimated at 800 MEUR, and in HEP count that the contract with strategic partner will be signed late in 2014. or early 2015th.

This agreement will also mean the commitment of financing investments closing for partners. For HEP that means that they need to resolve urgently relations with RWE, which according the contract should remain the co- owner of the TPP Plomin 2 by the April 2015, after which the plant will be acquired by HEP. In fact, in order to enter into a strategic partnership for TPP Plomin C construction HEP must be 100-percent owner of the Plomin complex. Asked at what stage were the talks, Seric said that talks were underway and that it was negotiated with RWE on the pay of the discounted future income from the electricity sale from the TPP Plomin 2 until the moment when the plant should belong anyway to HEP. This issue will be resolved in time, points out the first man in HEP. In that company expect that work on the new coal plant construction should start in  2015th while TPP Plomin C would be  in commercial operation in 2019th . HEP has obtained two of the seven location permits necessary to begin construction, and does not expect to have problems with permits. Asked whether the strategic partner would also get the ownership in TPP Plomin 2, which was also mentioned in the tender documents, Seric said that it was not subject of  HEP’s offer. The plant is fully depreciated, and the tender for plants procurements for nitrogen oxides purification in order to meet the strict requirements for high combustion emissions. Once it is built, TPP Plomin C will provide 19.4% of the base energy to HEP, by which this company will approach to the energy sufficiency because on average imports about 22% of the base energy.

Responding to a question about the local cooperators participation in the construction of this important plant, Seric said that the bidders in preparation for giving the binding offer were in close contact with the Croatian companies. Tender conditions are set thus that the participation in tenders for the works is guaranteed to the domestic industry and construction companies, and if they are competitive, they can count on getting a job. In HEP say that they have all right to monitor whether those condition have been met.

Source; Serbia Energy See desk

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