Serbia: Flood damage on the Serbian power system can be measured in hundreds millions of EUR, insurance companies on hard test

10. June 2014. / News Serbia Energy

The floods have made the most damage in the mines near Lazarevac. Nine excavators are underwater and the biggest among them worth as much as 30 MEUR. The total value of these machines exceeds 70 MEUR. According to preliminary estimates, only in “Kolubara”, said Aleksandar Antic, the Minister of Energy, the damage will be more than 100 MEUR.
EPS Headquarters ordered that all facilities provided the flood protection, but some did not obey. For TENT, TE-KO Kostolac … compensation insurance
The Serbian energy system has suffered huge damage from floods. Torrents flooded substations, flooded mines and endangered plants, and the account will be measured in hundreds millions of euros. The insurance companies will partly rehabilitate the storm consequences, but a huge expense of drying and repairs of excavators in flooded” Kolubara” and transformers of some distributions, apparently, will go to the expense of the state.
The floods have made the most damage in the mines near Lazarevac. Nine excavators are underwater and the biggest among them worth as much as 30 MEUR. The total value of these machines exceeds 70 MEUR. According to preliminary estimates, only in “Kolubara”, said Aleksandar Antic, the Minister of Energy, the damage will be more than 100 MEUR.
– Despite problems with the implementation of public insurance procurement that lasted several months, management of Electric Power Industry of Serbia provided that all be ensured over the cover note in all subsidiaries until the completion of public procurement procedure – say in EPS. -With a consortium “Wiener Städtische” and “Uniqa insurance” we also provided insurance for the flood protection over the cover note to all subsidiaries. However, some subsidiaries have decided to disobey the command of EPS headquarters and concluded contracts with other insurance companies. It turns out that in the cover note which subsidiary company MB “Kolubara” has signed with “Danube insurance” there is not an flood insurance.
“Elektrodistribucija Beograd”, Mining basin “Kolubara”, HPPs “Djerdap” and “Jugoistok” did not want to listen to orders from headquarters. They have insurance policies in “Danube insurance” or in DDOR Novi Sad, but most of them do not cover flooding. Also “Elektrosrbija” did not respect EPS recommendations and it does not have contract with any insurance company.
“Elektrodistribucija Beograd” has a cover note with DDOR Novi Sad, which includes flood insurance. Miomir Kosutic, Deputy Director of EDB, said that their substation were flooded in Obrenovac , Rakovica, Resnik … Just in Obrenovac there are 22 EDB substations underwater, into which they cannot enter even today. Kosutic did not want to specify what damage could be at EDB buildings, but said that this probably could be a million EUR.
According to the EPS instructions, TENT in Obrenovac, TE -KO “Kostolac”, “Drina-Lim hydropower plants”, “Center” protected the completed property, as the parent company – PE EPS. Insurers will reimburse the completed damage to them.
So far EPS members have filed nine damage claims to consortiums “Wiener Städtische” and “Uniqa”, of total value estimated at 1MEUR.
-We expect that the payment of these damages will begin next week. These requirements are related to sites Bajina Basta, Kragujevac, Smederevo and Veliki Crljeni – emphasize at this insurance company, noting that the demands will be resolved as soon as EPS gets the necessary documentation.

Demand that EBRD writes off the debts
Centre for Ecology and Sustainable Development (CEKOR) invites the European Bank for Reconstruction and Development to write off the debts of the Serbia Power Utility Company, who are invested in the machinery of the Mining basin Kolubara or if it is impossible because of EBRD politics or political opinion to redirect those funds to create a fund for resettlement of villages in destination of the Kolubara entire basin, namely resettlement of: Vreoci, Junkovac, Barosevac, Zeoke in the western region and Radljevo, Kalenic and other villages, which will have to be displaced because of the floods. Besides this debt write-off should be accompanied by a revision of the draft Energy Strategy of the Republic of Serbia, which, as it is known, massively relies on the development of lignite fields in the Kolubara basin especially of field Tamnava West which during last years has produced about 10-12 million tons per year, and it was planned that his production grows by 15 million tons per year.

Offer
The process of property and employees insurance procurement managed by EPS has not been completed because of bidders’ complaints, and their requests for bidders’ protection. That is the reason way EPS management has decided that in the meantime, until the conclusion of the open call, provides a cover notes to secure and protect property of all possible risks, including natural disasters that befell Serbia during May.
-Request for cover note issuance was sent to the address of the seven largest insurance companies in Serbia to ensure the competition – say in EPS. – It was elected a consortium, with appropriate quality or reinsurance whose bid was financially the most favorable. This offer is for even 6.5, percent cheaper than the offer that EPS received on the tender that is under appeal.

Download as PDF :

Download PDF