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Lawsuit over Gabčíkovo is over, contract for operation is invalid

The contract for operation of the Gabčíkovo hydropower plant is invalid because instead of a direct agreement with Slovenské Elektrárne (SE), a public tender should have been announced.

Gabčíkovo hydro-power plant(Source: Sme )

The dominant power producer Slovenské Elektrárne has lost its fight for the Gabčíkovo hydropower plant after the Supreme Court turned down its appeal. There is no other possibility to challenge the verdict of the Regional Court in Bratislava which decided on March 9, 2015 that the contract for operation of the Gabčíkovo hydropower plant is invalid because instead of a direct agreement with SE, a public tender should have been announced, the TASR newswire reported.

“The Supreme Court ended the time-dragging legal dispute over validity of the contract for operation of the Gabčíkovo hydropower plant closed between Slovenské Elektrárne and Vodohospodárska Výstavba when it turned down the appeal by SE,” said Ján Mažgút, spokesperson of the Public Procurement Office (ÚVO) as cited by the TASR newswire. “The verdict of the Regional Court in Bratislava which decided that the contract is invalid remains valid.”

The Supreme Court issued its verdict on June 29.

Read also: Read also:State takes control of Gabčíkovo

ÚVO challenged the validity of the contract for operation of Gabčíkovo on March 9, 2007. The District Court Bratislava II turned down the lawsuit on November 19, 2013. ÚVO challenged this verdict and the Regional Court in Bratislava ruled on March 9, 2015, that the contract is invalid. SE challenged the verdict on June 24, 2015.

Legacy of Gabčíkovo

The Gabčíkovo hydroelectric plant with an installed capacity of about 720 MW or about 7 percent of the annual electricity consumption of Slovakia, is the Slovak part of a failed communist-era Slovak-Hungarian twin-dam project on the Danube. It was hoped that the two dams, a project launched in 1977, would work together to provide electrical power, limit flooding and improve the navigability of the Danube.

Hungary pulled out of the project in 1989, but Czechoslovakia responded by switching to an alternative plan and building its part of the project. Gabčíkovo began operating in 1992.

Hungary terminated the treaty in 1992 against the will of Slovak officials and in 1993 the case was brought to the International Court of Justice in The Hague, which ruled that both sides had breached the contract and that the original contract was still valid. The dispute between Slovakia and Hungary continues.

Based on valid contracts the Gabčíkovo hydropower plant should have remained state property and was excluded from assets of SE allocated for privatisation. When Enel acquired 66 percent of SE assets for €840 million, it also signed a 30-year contract to operate Gabčíkovo. This meant that the plant remained state property, but was operated by SE – which also sold the electricity the plant generated.

During the time being Enel is selling its majority stake in SE to the Czech company Energetický a Průmyslový Holding (EPH) for €750 million. EPH already controls 33 percent of SE. The second phase will follow only after SE completes the third and fourth units of the Mochovce nuclear power plant, no earlier than in 2018. 

Topic: Energy


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