Montenegro: 300MEUR China Gezuba offer vs 330MEUR CZ Skoda Praha offer for construction of new TPP PLjevlja unit, SNC Lavalin and Rusatom pulled back

19. July 2013. / SEE Energy News

5 companies from China and one from Czech Republic, Slovakia and Poland applied for construction of the second block in TPP “Pljevlja”. Government intends to choose the most profitable offer for the second block of TPP Pljevlja in September and it needs to make a special proposal of the law that will define construction of this important energy project.

Model is similar to the one for highway because state won’t announce a tender for construction and it will choose the company that will get a job on the base of delivered offers.

10 companies are interested in the second block, eight of them have delivered offers and five of them are from China and one from Czech Republic, Slovakia and Poland. These companies should deliver final offers by the end of August.

Bidders from China are “China Machinery Engineering Corporation” (CMEC), “China Gezoba Group” (CGGC), “China Environmental Energy Holdings” (CEE HOLDINGS), “Power China”, “Design Institute” and “China Electric Engineering” (CNEEC). “Skoda Praha” delivered offer from Czech Republic, “Istroenergo Grupa”, and mixed consortium of companies. Companies that expressed interest and haven’t delivered offers are “Rusatom Overseas” from Russia and SNC Lavalin International from Canada.

The offer of Chinese “Gezoba Group” is according to unofficial information around 300 million EUR worth while the offer from Czech investors is around 10% more expensive and it would be around 307 million. Connecting of Coal Mine where A2A has the biggest individual property, EPCG whose co-owner is A2A and it manages with EPCG, is planned to happen by December. Italians asked for it. Opposition and SDP announced that they will support it only if that does not endanger major ownership in the power company.

This business need to be defined legally because of the risk it takes and where the most important questions are ecology questions, construction and adoption of detailed spatial plan of Pljevlja Municipality and expropriation.

Proposal of the law should be done by Ministry of Economy and Sustainable Development and Tourism, EPCG and Rudnik.

Minister of Economy Vladimir Kavaric said that basic project performances were investment value of 366 million EUR and average price per MW of million and a half.

“We have offer of around 300 million EUR at the table and I’m not completely precise because definitive financial offer will be determined within negotiation process. It is important that project is not based on issuance of national guarantees but it is financed on the base of internal potentials of EPCG. I think about the contract for electricity sale in the following period or on the base of EPCG property collaterals”, Kovacevic stressed adding that EPCG has sent final letter to all bidders last year.

Tender will include 8 watercourses, 2 of them in Savnik, two in Plavo and one in Bijelo Polje, Andrijevica, Berane and Pluzine with total energy value of 12 and a half MW. Investment is around 20 million EUR worth”, Kavaric said. Tender for concession issuance for use of 8 watercourses for small HPPs’ construction will be announced next week.

Government named Managing Board of Market Operators which will include Deputy Secretary of Development Projects’ Secretariat Biserka Dragicevic, Deputy Minister of Economy Marko Vujovic and Secretary of Vice President of the Government for Economy Policy and Financial System Goran Jovetic. President will get compensation of one average payment in the state and half of this amount is for members.

Source; EPCG/Serbia Energy See desk

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