Serbia: TPP Nikola Tesla TENT Flue gas project 200MEUR , bidders await the decision on project status

9. April 2015. / News Serbia Energy

After pre-qualification phase only three bidders remained in the game. Japanese consortium Mitsubishi-Hitachi and Andritz Austria are considered as major competition, third bidder German-Japanese consortium Steinmuller NSENGI is the third player. The reasons for delay of such an important project for Serbian-Japanese relations are unclear still. The most important environment protection project is also under monitoring of Energy Community and their opinion remains the same, they expect the full implementation of EU directives which implies the full FGD project implementation. The reason for delay may lie in EU directives prolongation until 2023 but in that case Serbian EPS has few delay-exit options.

Some other companies from world are hoping for a restart of the project, the tender itself. According to the media coverage Alstom decided to pass the bidding phase as it was not satisfied with deadlines as well as the German Babcock Borsig. Chinese bidders were interested but were blocked with tender preferences.

200MEUR FDG tender on TPP TENT A attracted all biggest market players, some decided to pass this race like Alstom, also some Chinese bidders were interested but remained outside the game. TPP Nikola Tesla TENT A is part of the TPP TENT Power plants company consisting of 4 power plants which are members of state owned power company EPS.

Technical evaluation is in progress and according to the official tender time line, published earlier on TENT web site, next step which is expected is the opening of bids once tech evaluation is completed and evaluated. Serbian medias reported earlier that the tender methodology is quite complex and that Chinese bidders will not be allowed to participate. Also some referenced US companies decided to pass this project.

There are speculations that complete project-tender will be restarted according to the academic circles in mechanical and electrical faculties. State power utility company EPS intention may be to evaluate the current project framework and start talks with Japanese side to restart the tender which may delay the whole process for 6 months. According to the european environmental activists from Bankwatch EPS may be interested in increasing the competition, current situation is that only three bidders are left in the game and possible restart of the tender procedure may bring additional world wide players like GE-Alstom, US companies and even Chinese-European consortiums.This event could give an opportunity for EPS to assess the financial scopes of the bidders and prepare for the next FGD project on TENT B location.

Similar project financing framework is agreed in Republika Srpska where 106MEUR FGD project is agreed for TPP Ugljevik. Beside MHE, Andritz and SBENGI also its bidd was presented by Alstom, these are the bidders selected in per-qualification phase. Bosnian center for journalism investigation CIN reported that FGD project in TPP Ugljevik is a complete failure and runs with delays, the project itself is not feasible from financial side. CIN reporter confirmed to us that FGD TENT may be restarted as there is almost non existing competition between MHE and other bidders. According to CIN reporters who compared both Ugljevik and TENT FGD financial framework  loan from Japan is better for Ugljevik than for TENT. Still there are no bigger delays with FGD TPP Ugljevik.

Energy Community directives impose environment actions of both power utility companies and FGD projects are of great importance for this action plan for EU directives implementation. It was confirmed to us that EC is monitoring both FGDs and its transparency of the whole procedure in the same time asking why there are delays in project implementation and why the public is not informed. Green party of Serbia as well as the Green Serbia EU Green party associate confirmed to us that public should be informed about this project and that they will raise this question both in EU and Serbia. There are serious complaints, more precisely growing trend of public interest for FGD and remarks are addressed to low level of understanding of the importance for Stakeholder relations. FGD TENT it is one of the most expensive and one of the most wide impact projects on Serbian energy sector and local and national environment. EU is monitoring the process.

Biggest environment protection investment project in Serbian thermal power plants is 200MEUR flue gas desulphurization project in TPP Nikola Tesla A ( TENT A). Financing is secured from Japanese soft loan and the project is supervised by JICA Japanese agency for international cooperation. TEPSCO consultancy is hired to monitor the tender procedure as support to JICA and EPS.

Japanese loan mechanism may be the framework which will be used for similar project on TPP Nikola Tesla TENT B.

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