PRESS RELEASE

The working team tasked with implementing the project of construction of the Unit II of TPP Pljevlja, consisted of representatives of Montenegro's Government, EPCG and Pljevlja Coal Mine, have impartially presented the ongoing project activities in their comments to the statements made by MANS, as well as all the aspects that impact the project implementation. The working team has shown once again that analysts from this NGO have no elementary economic and financial knowledge, nor do they take into consideration a broader view of energy situation and charactesistics of the electric power system.    

The comments made by the working team repeated once again that the total cost pertaining to the Unit II, including costs of loan funding, should in no way exceed €450 million, and they should not exceed one billion euros as referred to in the document made by MANS.

Furthermore, this NGO claims that costs of health care and environmental protection during operation of the Unit II have been estimated at additional 2.5 billion euros. It is not clear either for the professional or the layman which sophisticated method was used by MANS to reach the additional cost of health care of €60 million per year caused by construction of the Unit II. The total 2015 budget for the health care system in Montenegro was €170 million, out of which €80 million relates to employee salaries. The Unit II will operate in accordance with the most stringent EU standards, and it is not clear how it will impact creation of almost double costs of medical treatment in Montenegro.

Statements made by MANS about the Unit II are poorly constructed, based on inaccurate and provisional claims. What indicates the seriousness of its analysis is the statemement that the costs of opening all mines would cost €145 million instead of €73 million.

On the other side, all expert analyses made by professionals claim that reclamation of all mine pits cannot exceed 5 million euros, whilst MANS calculates with the figure of €85 million. MANS still claims the lack of sufficient coal quantities, although all the analyses prepared by distinguished companies indicate that there is enough coal for operation of both units. Furthermore, MANS speaks about 100 million euros neccessary to reconstruct the Unit I; however, ecological reconstruction of the Unit I would actually cost about €20 million, through implementation of the Unit II. Otherwise, reconstruction without the Unit II would amount to about €40 million.

This non-governmental organization has expressed doubts over the existence of electricity deficit in Montenegro, what represents the total ignorance of electric power situation. The public has long since been informed about the problem of the country's lack of electricity; from 2003 to 2013 Montenegro imported about €900 million electricity, which is why is it neccessary to construct electric power plants.

Economic success of the Unit II project is measured not only by a simple sum of various costs, or by the result of individual extreme situations, as stated by MANS, but based on numerous other complex parameters.

As far as the country’s energy policy is concerned, let us emphasize that Montenegro’s Government, Elektroprivreda Crne Gore and the Coal Mine Pljevlja are investing efforts to accomplish strategic tasks so as to ensure electric power independence of the state, eliminate current electricity deficit, improve safety of customer supply and improve the country’s stable and sustainable electric power system. All these activities are conducted in compliance with EU regulations, in all domains treating electric power on Montenegro’s path towards the European Union, as well as in those treating environmental protection. Also, long-term energy stability, as well as Montenegro’s energy independence represent a prerequisite for Montenegro’s economic development, in compliance with all obligations undertaken by the Agreement on the Energy Community of South Eastern Europe.

When speaking about transparency, let us point out once again that the process began by sending invitation letter for submission of bids, with defined basic technical and commercial requirements for the new energy unit and conditions for partnership participation in implementation of this project, with the possibility to ensure a favorable funding. The process of finding the strategic partner for joint investing has started, not only of finding the supplier of the equipment or the investor. Article 111, paragraph (1), clause 3) of the Public Procurement Law (Official Gazette of Montenegro No. 42 of August 15, 2011, No. 57/14, 28/15) has envisaged exemption from implementation of the public procurement procedure, in order to establish this type of partnership. Given the fact that the model of project implementation has estimated the partner’s ability to enter capital structure of the company in Pljevlja, or through the third partner, it is not possible to have a tender procedure because the partner should be found, not only supplier of the equipment or the investor. The interstate agreement is necessary to finish the job without public tender, which is being developed in parallel while waiting for alignment of the main agreement. Therefore, EPCG submits the decision and the initiative for signing of the interstate agreement to Montenegro’s Government and EPCG Shareholders' Meeting, the Government adopts the proposal of partnership and sends the proposal of the interstate agreement to the partner state; following alignment of the wording of the interstate agreement, the Government submits the agreement to the national Parliament for adoption. Montenegro pays special attention to the Stabilization and Association Agreement, concerning particularly the transparency principle and the rule of equal treatment in the access to the market. The invitation for submission of bids was sent to all relevant companies estimated to be able to meet the project requirements, in compliance with the market access rule, pursuant to Article 76 of the Stabilization and Association Agreement. To support the above stated, the fact is that attention was not paid to the company’s ownership, but only to the company’s qualification to adequately meet the project requirements, and all data about the process itself are published on the official web-site of the Ministry of Economy as well as on the web-portal of Elektroprivreda Crne Gore, thus making the said procedure transparent for all the participants. Given the short time period within which to implement the said project and its values, invitation for submission of bids was submitted to addresses of 13 relevant companies which expressed interest in the project and which are financially and technically capable to meet the technical and commercial bid requirements. Following reply of the companies, bids submitted by Škoda Praha, Hubei and CMEC were selected as completed bids, after which negotiations have been continued with CMEC, the Chinese company and Škoda, the Czech company. Negotiations are currently conducted only with Škoda Praha, given that their bid was assessed as the most favorable.

At the process beginning attention was paid to the EU Public Procurement Directive 2004/18/EC and the Council Directive 2004/7/EC which envisage exemption from application of the said directives for certain contractual entities, which also include those contractual entities engaged in electricity generation, as well as exemption from application of such regulations for the agreements awarded in compliance with signed interstate agreements.

Let us emphasize once again that the project of construction of the Unit II of TPP Pljevlja is specific, it is not about procurement of equipment but about selection of a strategic partner for joint investing, and it is clear that the said project is not included in the system of an open public procurement process.

The interstate agreement is continuation of an institutional cooperation referred to in the Agreement on Economic and Industrial Cooperation between the Czech Republic and Montenegro signed in Cetinje on April 27 2011. 

The interstate agreement has created the mechanism for interstate cooperation between companies from the Czech Republic and Montenegro, as well as an institutional support in implementation of large investment projects such as the project in question which should be implemented through partnership relation between EPCG and the Czech company Škoda Praha. The strategic partnership established in order to implement infrastructure energy projects, such as the construction of the Unit II of TPP Pljevlja, has offered the possibility to further define areas of cooperation of common interest. In the event of the implementation of the said strategic partnership, relations between contractual parties will be regulated in separate agreements.

Therefore it can be concluded that the objective of the MANS' document in question is not to inform the public about the project facts, but to manipulate the public so as to leave enough space for various interpretation.