Elektroprivreda BiH sends third warning to Chinese consortium before contract termination for Block 7 construction

(Patria) - Elektroprivreda BiH has sent a third warning to the Chinese consortium "China Gezhouba Group Company Ltd" and "China Energy Engineering Group Gunadgong Power Desing Institute Co. Ltd" in which they are warned to start the construction of Block 7 of the Tuzla Thermal Power Plant.

The contract with these Chinese companies was signed nine years ago, and the project value is 350 million euros. The construction of the facility has not yet begun.

So far, with the consent of the Government of the Federation of Bosnia and Herzegovina, two warnings of contract termination have been sent to the Chinese consortium.

In September 2020, the Chinese consortium informed JP Elektroprivreda BiH about the withdrawal of an American company to be a subcontractor in this project.

This refers to the American company "General Electric", which withdrew from the project due to non-participation in coal-based business.

The Chinese consortium subsequently proposed alternative Chinese subcontractors for key equipment, which Elektroprivreda did not accept, stating that the alternative subcontractor did not meet the requirements, RSE reports.

"With the consent of the Government of FBiH, we made the decision not to accept alternative equipment suppliers because they do not have the references, knowledge, and experience to implement the contract for the construction of Block 7.

We have also informed the consortium about this, with a request to proceed with the fulfillment of contractual obligations," stated on the official website of Elektroprivreda BiH.

Chinese companies have previously been partners in thermal power plant construction projects in Bosnia and Herzegovina, one of which is "Stanari" in Republika Srpska, which was commissioned in 2016.

Due to the Block 7 project, the Energy Community imposed sanctions on BiH in December 2020, warning that the construction of new thermal power plants in BiH deviates from the EU's policy on the decarbonization of Europe.

The Federal Government requested the termination of the contract from Elektroprivreda BiH last year. The Parliament of the Federation of BiH, as the legislative institution deciding on this project, should also discuss this.

Incidentally, a conclusion on the status of Block 7 of the Tuzla Thermal Power Plant has been in procedure in the Parliament of the Federation since July last year. This conclusion has never been considered.

Since its construction in 1959, the Tuzla Thermal Power Plant has been the largest producer of electricity in Bosnia and Herzegovina to date.

The new block was announced as a replacement and was supposed to lead to the shutdown of several existing blocks, thereby reducing pollution and carbon dioxide emissions.