Government buying an alibi for future decisions concerning thermal power plant through Intergovernmental agreement with the Czechs


Through verification of the interstate energy agreement between Montenegro and the Czech Republic which MPs will discuss tomorrow, the government of Montenegro is given a blank check or the alibi to continue with the implementation of the Unit II of the thermal power plant in Pljevlja, despite the fact that the public has not been offered any solid evidence that this project is economically viable and in the public interest.

The proposal of the interstate agreement with the Czechs, which the government submitted to the MPs to vote, is an institutional framework for the implementation of the construction project of a new thermal power plant in Pljevlja. In April last year, the offer of the Czech company Skoda Praha was selected as the most favorable for the construction of the Unit II and adoption of an interstate agreement would ensure coming to an agreement with Skoda.

However, the government is asking the MPs to give “the green light” for the project of the Unit II in advance, although a series of issues with the Czechs has not been resolved yet, a financing model of the project being the crucial one.  Furthermore, the government has not given reliable and accurate data on the overall costs of construction and operations of the Unit II of the thermal power plant in Pljevlja, and to which extent and in what ways the project will affect citizens’ health and the environment.

Responsible attitude of the executive power towards the present and future generations of Montenegrin citizens would imply that the government first make public the studies on the cost-effectiveness of the investment, then organize the widest debate where citizens and experts would have the opportunity to speak out about all the advantages and disadvantages of building new thermal power plants, and only at the end finalize the construction agreement.

Instead, the government and EPCG (Montenegrin Electric Enterprise), the project stakeholders, have been negotiating terms and model of financing the Unit II with Skoda Praha behind the curtain, and there is a great risk that the final agreement will be to the harm of public interest. It has to be kept in mind mostly because the Unit II project does not only concern citizens of Pljevlja, but all Montenegrin citizens, as they will finance it through their electricity bills.

In addition, the recent government’s study on the feasibility of the project of the Unit II has not confirmed its economic viability. The study was made by Deloitte consulting company for the needs of EPCG. Deloitte dissociated itself from the start, saying that the data in its possession were not verified, so it could not give any opinion, nor certainty as to the shown projection.

 MANS Investigation Center, on the grounds of single parameters from the Deloitte study, has stated that the price of electricity will have to increase almost fourfold, or 376 percent by 2040 in order for the Unit II to be cost-effective.

Although the government’s officials and representatives of EPCG and Rudnik uglja (Coal Mine) have argued that one of the main reasons of constructing the Unit II will be the preservation of jobs in those companies, the study clearly shows that due to production cost rationalization, at least 450 employees in the mine and the power plants will lose their jobs.

At the same time, the government left EPCG and Rudnik uglja to make a final decision through further negotiations on the price at which Rudnik uglja will sell coal for operations of the new thermal power plant. MANS has already pointed out that Rudnik’s profit will depend on the margin, or the extent to which it is in the privite interest of A2A and the prime minister’s brother Aco Djukanovic, who are, besides the state, the majority shareholders in the company.

As of 1 January of the next year, the European Union forbids its member states to finance construction projects of thermal power plants  which obviously rushes Milo Djukanovic’s government to push the Unit II construction project through the backdoor of the Montegrin parliament and wihout an in-depth discussion, which would be confirmed in the parliament before October elections and forming new parliamentary session.

MANS expects MPs to have a responsible attitude towards this important issue, and calls on them to reject this agreement with the Czechs, before all relevant information concerning the cost- effectiveness and  the project’s impact on human health and the environment is not publicly available.


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