Serbia: How real was the Securum 1Giga project, lack of transparency or corruption arrangement

20. August 2013. / News Serbia Energy

American company asks for 160 million EUR compensation fee while Dejan Trifunovic, State’s Secretary in the Ministry of Energy says that there is no legal condition for it.

American Company “Securum Equity Partners” confirmed last week that it had broken up a contract for construction of solar park in Serbia with our government and that it will ask for compensation fee of 160 million EUR on international arbitrage in London. Supposedly, Serbia has not accomplished obligations from the agreement that predicted provision of 3.000 ha locations for construction of solar plant 1.000 MW strong- it is confirmed from this company.

The framework agreement for construction of solar park in Serbia, the biggest in Europe was signed in October 2012 when 1,75 billion EUR were announced to be invested in this project.

Dejan Trifunovic, State Secretary in the Ministry of Energy explains that it is completely unnecessary to give so big publicity to the whole case because it is a company that does not have any profit and, however it gave a chance to Serbia to come and look locations where solar park can be constructed.

-We need to ask Ministry of Finance that found and brought investors and Ministry of Energy is only technically involved in the story because this is solar energy. Ministry have shown some suspicions to this investment because this is 1.000 MW (like “Djerdap 1”) which is a huge plant and Ministry of Finance claimed that it is big and good chance- Trifunovic stresses.

Asked if there is some base for this company to sue us to the court in London and ask for compensation fee of 160 million EUR, our interlocutor said that Serbia can ask charge of penalties of 900.000 EUR because investor didn’t respect any issue from the contract.

-Government shall decide if everything will end with contract breakup or they will ask for compensation fee- Trifunovic stresses and adds that there is no damage to Serbia because of the breakup except for lost time because investors were leaded to observe land.

He emphasizes that it is just unbelievable that “Securum Equity Partners” have not found any on the territory of 30.000 ha appropriate for their work.

Transparency Serbia recalled on this occasion asking from government to ordinarily publish memorandums and agreements that are signed with foreign companies considering that Serbia had some bad experiences with contracts and agreements that were hidden from the public eye and among which is construction of solar plant in South Serbia the freshest case.

Transparency Serbia states that the fact these are public-private partnership businesses in most of the cases and that the Law for Public-Private Partnership is not used in the preparation, although it was adopted in order to arrange this area to be attractive for investors but potentially highly risky from the corruption point of view.

Asked if this breakup brings damage to Serbia, Mahmud Busatlija, Consultant for Foreign Investment says that it is but only from the aspect of lost time and that there is no other damage.

Unfortunately, almost 99% of investors in Serbia are not real but speculative investors why contracts are broken in most of the cases.

-This case reminds on the case when the only foreign company wanted to construct a refinery for 250 million dollars in Smederevo and everyone knew that it is unrealistic- Busatlija explains. He says that this tells us much more about that who we sign agreements with because someone constantly threaten us with arbitrage and it is not the practice for companies that have name which is not the case here because profit of the company was disputable from the very beginning.

-World referenced company and serious institutional investor which wants to invest in Serbia and knows that it has a serious negotiator like government, cannot wave with lawsuit this way and ask for compensation fee of 160 million EUR – Busatlija concludes.

 

Source; Serbia Energy/Politika

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