Government terminates contract with SE on Gabčíkovo water plant

Slovak government will end the contract concerning the operating of water power plant Gabčíkovo (VEG) with the Slovenské elektrárne (SE) energy company, Prime Minister Robert Fico announced December 4.

Slovak government will end the contract concerning the operating of water power plant Gabčíkovo (VEG) with the Slovenské elektrárne (SE) energy company, Prime Minister Robert Fico announced December 4.

The pretence for doing so are alleged grave violations of the contract by SE majority shareholder, Italian company Enel. “After eight years of operating the VEG by the Italian company Enel and the privatised Slovenské elektrárme we decided to terminate the contract on operating the VEG with the output of 720 MW as of today, due to grave violations," Fico said, as quoted by the TASR newswire.

Enel refuses to purvey to government the basic information that would enable them to find out to what extent is the division of profits from VEG just for the Slovak state, prime minister said. He added that they see no plans for reconstruction and larger repairs of the power plant that has life-span of 20 years that has expired already.

Fico pointed out that in 2006, a contract between the Slovak Water Management Construciton (Slovenská vodohospodárska výstavba, SVV) which today Gabčíkovo, and SE was signed on the operation of the water power plant. According to the contract, SE should pay €5 million a year to the SVV for maintenance. “The Italian company questions this, and even requires Slovak state to pay it €43 million back, allegedly for paying this money due to the signed contract,” premier said. “Until this day, they are paying the whole money with huge reservations.”

Fico also reminded that his government had contested the contract on VEG operation in 2007 at a court, as they considered it invalid. However, until now, the courts have failed to rule in this case. He is convinced that the government has right to terminate the contract, arguing with calculations and blaming the preceding government for the “nonsensical deal”.

SE rejects all Fico’s allegations, the company spokeswoman Janka Burdová told TASR. “We repeatedly stress that we have always acted in compliance with the requests and contracts of the power plant’s management,” she said. “We are awaiting an official notification of the termination, and we do not rule out legal steps to protect our rights.”

Burdová added that SE receive annually 35 percent of the revenues form power produced in Gabčíkovo, but it also pays all fixed operation costs and expenses for the maintenance of the power plant. “The company continuously invests in the projects to increase the operation reliability and safety of the plant,” she said.

(Source: TASR)
Compiled by Zuzana Vilikovská from press reports
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