For the Czech company Škoda Praha one of the preconditions for the construction of the second block of the thermal power plant in Pljevlja is that a newly established company which would manage the second unit, has no right to give out dividends in the next 15 years, which is the planned time of grace period and loan repayment period.
NGO Mans claim this could be one of the issues with A2A and one of the reasons why the Italian company was not willing to get involved with the project of the construction of the second block, Dan reports. In the end of March last year Škoda Praha gave Elektroprivreda an offer, which was selected as the best bid two months later. In the meantime EPCG started negotiations with the Czech company in order to define the final conditions for the construction of the controversial project, but negoiations are not over yet. As the media reported, the negotiations are currently blocked because it is not known who will be the guarantee for the loan to finance the complete project.
According to data from MANS, in the strategic partnership model, Škoda Praha demanded several conditions to be fulfilled for the construction of the second block, out of which the most important one is the demand that both EPCG and strategic partner have to give consent when finding a guarantee for the loan.
Instead of finding a strategic partner, the Government announced recently that the project of the second block will be realized by forming a company where the state and not the strategic partner, will have 51 percent of ownership and EPCG will have 49 percent. The state energy company will then buy electricity from this new company at a cost related price in order for the new company to be sustainable.
According to the offer from the Czech company, the construction of the second block is estimated at 338.5 million euro, out of which maximum 85% or 287.7 million euro would be provided through a loan from Czech Export bank. Grace period is three years, and loan repayment period is 12 years with the interest rate of 2.5 percent, plus six months euribor.
Škoda Praha demanded for the business plan for the second block of the thermal power plant to be defind for the period of 15 years (including the guarantee system which will provide both input and output price and quantity) and for the 15 years business plan for EPCG, as well as to define the property of the existing first block and the future second block of the thermal power plant, what is common equipment, or what will happen to the property of the first block when it is shut down. The Government said earlier that the first block will be working until 2024.
It is also stressed in the bid that Czech Export Bank will not allow the payment of dividends to the future joint company, that will own the second block, until the loan is fully repaid in the period of 15 years (three years of grace period and 13 years of loan repayment).
Besides that, the Czech company said that they based the estimate of 338.5 million euro for the construction of the second block on data from feasibility study and other documentation provided by EPCG before the final bidding, and that they keep the right to adjust the estimate in case any changes occur. The price does not include VAT, because the Government adopted amendments to the Law on VAT which excluded strategic interest energy projets from VAT.
The Czech related the estimate with the currency exchange rate of euro and CZK (one euro to 27 CZK), which would be defined on the day of signing the contract, and if the rate would change more than 3% between that date and final announcement, the estimate would be related to the new rate.
The working team consisting of representatives of the Government, EPCG and Coal mine Pljevlja is negotiating with representatives of Škoda Praha behind closed doors since the beginning of June, depriving the citizens of any information regarding the conditions for the construction of the second block, which will be a new cost for the tax payers and an introduction to the state assitance to energy companies.
Even though the Government claims that the construction of the second block is profitable, they have not provided any relevant information to confirm such claim, while they have not included health and environment costs in the price of the project.
Earlier analysis of the Research Centre of MANS showed that total costs of the project could surpass a billion euro, that the project is not in the public interest and that it would significantly burden the country’s budget.
They are planning a long term contract with the Coal mine.
It is notable from the Škoda Praha offer that the company managing the second block will sign a long term contract on coal supply with the Coal mine, but the conditions are not known. The research Centre of MANS published an analysis earlier which shows that the Coal mine whose biggest share holders are the Italian company A2A, the Government and prime minister’s brother Aco Đukanović, could not keep up finacially with the second block project without the subsidies from the state. In that sense it is indicative that recent amendments to the Law on energy, which made coal exploitation for the purpose of electricity generation an issue of public interest, which opens up room for state subsidies.
Besides that, MANS published that commercially profitable coal reserves in the Pljvelja basin are sufficient only for 20 years of the second block operation, if constructed according to the Czech company’s bid. The project of the second block is based on 40 years operation of the future thermal plant, so at one point it would be necessary to open the Maoča site, which is tenths of kilometers far from Pljevlja which would significantly increase the cost of the entire project.
EPCG and Coal mine are currently arranging directly the coal delivery for the existing block of the thermal power plant in Pljevlja. It is a public procurement worth 40 million euro on the annual level, and it is not controlled by any authority in the state.
Aco Đukanović owns 11.8 percent of the Coal mine shares, while A2A has 39.5 and the share of the State is 31.1 percent, transmits Serbia-energy.eu