Банкеръ Weekly



Almost two months after the Energy MK consortium won the tender for the sale of the Bobov Dol thermoelectric power plant (TPP), on Thursday (August 21) the Privatisation Agency's Supervisory Board approved the draft contract for the power station's sale, which was signed then. The financial value of the deal entered in it is BGN168.4MN, but that amount includes also the investments promised by the new owner. In fact, Energy MK which is within the business empire of one of the top investors in the Bulgarian energy sector, Hristo Kovachki, bought Bobov Dol for just BGN100MN - the lowest possible price set by the PA. The reason was that no real bidding was held. Quite expectedly, the other participant admitted to the competition - Mining Company - which is also connected with the same businessman, dropped from the competition as it suddenly turned out that a payment order for the required guarantee of BGN5MN was missing from its tender dossiers. Thanks to that fault, in addition to the money for the guarantee, Mr. Kovachki economised also BGN1MN, that is the minimum size by which the bid had to be raised.
Investments over the next five years should be at least EUR35MN in order to bring the company's operation in compliance with the European requirements for environmental protection. It was due to ecological problems that the second one of the three 210-megawatt units of Bobov Dol TPP was decommissioned in the beginning of 2008, which was also the reason for the lower selling price announced by the PA. In fact, only the first generator is working now and the station's management explained that the third one would be commissioned within a few days when the repair of Kozlodui N-plant's unit 6 begins. However, then it will be again stopped for preventive maintenance.
Besides the above-mentioned investments, under the privatisation contract, the new owner should be buying at least 1.75 million tons of Bulgarian coal a year until 2011. That condition seems rather void of sense, bearing in mind the fact that it is Mr. Kovachki who owns many of the coal mines in the region. The Energy MK consortium itself includes the Chukurovo, Beli Breg, Stanyantsi, Oranovo, Open Coal Mining, and Balkan MK mines. And considering the fact that each of the power station's generators burns 5,000 tons of coal on average in 24 fours, we could be certain that the above requirement will be overfulfilled several times.

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