Serbia: Why did TENT/EPS made non tender purchases from Alstom and Rafako against the procurement procedures, turbines and boilers project under investigation, News Serbia Energy
Out of all connected enterprises within the Serbian power utility company EPS, the company that was investing the most of money in EPS is TPP Nikola Tesla (TENT) in Obrenovac. This company made several business agreements with Alstom power for supply of different equipment, however without tender or open bidding procedures as its prescribed by procurement law in Serbia. This latest information published by Tabloid magazine generated high level alert and storm as procurement law was not followed and legally contracts are not legal according to Tabloid. Direct purchase of turbines from Alstom limited other bidders like Siemens or Russian suppliers to participate on the project.
The first contract was related to the purchase of new turbine for A3 block, 300 MW strong what was done by direct purchase from Alstom Company. The value of the contract is 23 million EUR. The contract is concluded in April 2012 and they paid advance a few weeks later. This purchase has not gone through the prescribed procedures in order to enter the plan and it is not placed in EPS’s plan for 2012 so it couldn’t motivate purchase with this. Turbine was announced by direct bid after Alstom became the original producer of all turbines in EPS including the old turbines.
When we are buying reserve parts for existing turbines, the parts of original producer are logical to be bought but why are we buying the completely new turbine from the old producer, asked Tabloid magazine. It is the same like somebody buys a car in explanation of motivation of public supply and says “we are buying the new Mercedes car model, because we have the old one”. It isn’t in accordance with the Law for Public Supplies.
This is falsification of official document. TENT could, if it wanted, to announce an open tender procedure and Alstom, Siemens and Russian Tehnopromeksport to answer, but obviously they wanted to set business to French Alstom. The same model of business framework was done for purchase of the new turbine 100 MW strong for TPP Morava. Turbine was again purchased against the law by direct agreement with Alstom with the same explanation, as well as for A3 turbine in TENT.
TPP Morava is the part of TENT and this investment wasn’t n the business plan for 2012. The contract was signed in the end of September i.e. several weeks after the new Acting Director of EPS, Aleksandar Obradovic’s arrival and around a month before Director of TENT, Petar Knezevic was dismissed. Knezevic obviously cares for TENT’s supplies very much or it hurried to sign a contract 7 million EUR worth while he was at the director position.
TPP Morava is planned for turning off in the next 10 years. The old turbine has been successfully worked for 40 years so the mentioned supply was not necessary. Director of Ecology in EPS, Mihajlo Gavric, tried to explain the base for purchase. He has put this plant in some documents as a future waste to energy power gen. In other words, it means that someone renews the house he lives in and he knows that he will move out in 2 to 3 years.
Knezevic has arranged six months’ overhaul of the block B in TENT. More than 50 million EUR were invested in the work. Purchase of the parts was arranged directly with Alstom and Rafako at that occasion. The explanation was that Rafako Srbija is the direct producer of boilers.
This is untrue because Rafako was the project contractor while producer was some other company from Germany. Experts in this kind of equipment say that there is no need to arrange anything in the boiler because every performer that has enough knowledge can make documents he needs by himself. So there is no need for direct arrangement but this is direct law breaking and we need to go in tender procedure. Business with Rafako is made by falsification of the Official Administration on the base of which public supply without tender was launched and then they made an agreement for business technical cooperation that is 1 million EUR worth.
Tabloid has analyzed the contract Kostolac signed with consortium of domestic producers that were buying equipment from Alstom. We should mention that Consulting Services were given by companies SEEK and Dekotra at that occasion. The role of these companies was unclear to EPS and Kostolac engineers, their activities were an offense to EPS engineer’s profession. These engineers just watched helplessly how their workplace was stolen by some company which doesn’t know anything about this industry.
It’s not time for the Chinese
Minister of Energy Zorana Mihajlovic and Executive Director of EPS, Aleksandar Obradovic don’t want to cooperate with Chinese Company “China Waters” (CWE). Business of construction of reversible HPP Bistrica is wanted to be set to Canadian Company SNC Lavalin which is on the black list of the World Bank. Reversible HPP Bistrica is one of the most attractive energy projects in Europe. Pumps would throw water from the Potpec Lake and Klak Accumulation in Uvac Kanjon. Water would arrive in turbines of HPP Bistrica within tunnel with height fall of 365.
This reversible HPP would produce electricity that is used for balancing of electricity system. It would produce overages that would be exported as pure energy at the highest prices.
EPS has signed a Memorandum for Intentions with several companies including CWE. Only expert teams of CWE delivered satisfying technical and commercial offer. Representative of this company met with the Serbian Prime Minister Ivica Dacic, Minister of Energy Zorana Mihajlovic and Serbian President Tomislav Nikolic and with Acting Director of EPS Obradovic. Company was planned to give an offer for realization of this strategic project by march 2013. Chinese company sent an offer for realization of mentioned project and Acting Director and Minister Mihajlovic denied to except it and they said: “It’s a good not time for your offer!” Minister Mihajlovic has declared then that this HPP will be constructed by Canadian SNC Lavalin, Company which is put on the black list because of nontransparent business. Is this the partner which Serbia should select for such an important HPP project Bistrica?