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Papers: Cost of New TEŠ Generator Higher Still

Ljubljana, 25 May - The cost of the biggest ever energy project in independent Slovenia has apparently risen again as unofficial information cited by the business daily Finance on Friday and daily Delo earlier this week indicates the value of a new generator at the Šoštanj coal-fired power plant has exceeded EUR 1.4bn.

The Šoštanj coal-fired power station
Photo: Tamino Petelinšek/STA

New figures were reportedly on the table as the supervisory board of the plant operator TEŠ met on Friday. Finance cited sources close to the company in saying that the price tag on the project had most recently increased by EUR 100m but was unlikely to stop there.

The sources said the increase was mainly due to penalties charged over delays by the main supplier Alstom, as well as the cost of financing of the bridging loans that TEŠ and its owner HSE used to secure liquidity and pay the bills.

Finance's sources also said that the price of installation of the equipment was to go up too, but that it was not clear yet by how much exactly.

Delo reported on Monday that the investment had increased to EUR 1.43bn, but the owner of TEŠ, the state-owned power utility HSE, assured the STA on Wednesday that the cost remained EUR 1.3bn.

HSE said that a new time plan and a comprehensive report on the current state of the project would show whether and if, by how much the costs would increase. The reports are to be available early next week.

If the cost in fact exceeded the EUR 1.303bn set in the amended investment plan, this would violation of the terms TEŠ agreed with the government as the latter approved the guarantee for a EUR 440m loan from the European Investment Bank (EIB).

The state guarantee was approved by parliament in July 2012 after the decision had been postponed several times over concerns about the growing costs, suspicions of wrongdoing and environmental concerns. TEŠ did not get the EIB loan until 14 March this year.

© STA, 2013