Банкеръ Weekly



SALE OF STATIONS IN ROUSSE AND BOBOV DOL STILL DRAGS ONThe term for finalizing the deal on the Varna thermoelectric power plant (TPP) with the Russian joint stock company United Energy System (RAO UES) was extended by ten more days, the Privatisation Agency (PA) announced on Monday (September 19). This is the fourth successive prolongation of the term and is the shortest one - the previous three were a month each. According to the PA, the new postponement was motivated by the possibility for the parties to reach mutually acceptable decisions for concluding the negotiations process within that period.On Monday, again, the PA extended also the term for closing the contract for the sale of the Rousee TPP, but no final date was fixed. PA's decision only reads that the term has been prolonged till the Supreme Administrative Court (SAC) voices its conclusive ruling on the appeals against the decision of the Commission for Protection of Competition (CPC) for concentration of economic activity if the two TPPs are purchased by RAO UES. The two appeals (by the PA and the Russian energy company) were filed in August, a few days before the supreme magistrates went on a summer holiday. No date for hearing the cases has been fixed yet. According to pundits, however, if the SAC allows the Russians to buy both TPPs, the PA will again extend the term for the Rousse station in order to complete the negotiations with RAO UES.Meanwhile, it became clear that within three years the power plant will have a unified system for management of technological processes in all of its units. The modernization of generators 4, 5 and 6, carried out by the German giant Siemens, will be completed by end-October. A contract for the modernization of the first three units was signed during the week and the work will start still this month. The EUR11MN worth project will be implemented by Siemens again, in partnership with Bulgarian engineering firms, the company's Bulgarian representative office announced on Wednesday (September 21). The signed contract projects design, supply, installation and commissioning of automated equipment of the generators. On Wednesday it was also announced that the CPC had refused to the Rousse TPP to use an interest-free credit from the Enterprise for Management of Environmental Protection Activities (EMEPA), earmarked for closing down a waste dump. The financing of this specific project by EMEPA funds will be at preferential terms - an interest-free loan which the company could not get on the private capital market, the CPC explained. According to the antitrust commission, the credit that would place the Rousse TPP in a more advantageous position than its competitors is inadmissible assistance on the part of the State and cannot be extended therefore. The fate of the third biggest TPP in Bobov Dol, the procedure for whose sale was announced simultaneously with the deals for the TPPs in Varna and Rousse, is still not clear. The PA terminated the deal due to the insufficiently good parameters of the filed offers. The Greek state-run company РРС, however, which offered a much higher price than its competitor Enel (EUR70.9MN vs EUREUR100,560 of the Italians) appealed in front of the SAC the decision for the sale's cancellation. The supreme magistrates fixed November 8 as the date for hearing the case by a three-member team. No matter what the ruling is, the loser will most probably appeal against it. Therefore, SAC's final decision is expected in the spring of 2006. Till then Bobov Dol's fate will not be clear. Meanwhile, the TPP's management began an overhaul of unit 3. The aggregate worth of signed contracts is a little more than BGN5MN (almost BG4.5MN with Energoremont Holding AD - Sofia and about BGN700,000 with a consortium from Vratsa). During the week it was announced that the Metalengineering EOOD consortium was contracted additionally and the agreement signed with it is worth almost BGN260,000.

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