The second block of the thermal power plant under the scrutiny of the Parliament


pljevlja1Non-governmental organizations  MANS and Green Home requested today from the President of the Parliamentary Committee for Economy and Finance to convene the session of this parliamentary body, on which it would be conducted control hearing of Prime Minister Milo Djukanovic, Deputy Prime Minister Vujica Lazovic and the Ministers of Economy and Finance Vladimir Kavaric and Radoja Zugic due to the announced of the project of building the second thermal power plant in Pljevlja.

MANS and Green Home expect that the president of the Committee for Economy and Finance Aleksandar Damjanovic invite to the session the management of the National Electric Company (EPCG), together with representatives of the Italian A2A as a strategic partner, as well as the leadership of Coal Mine Pljevlja, which is directly involved in the entire project, and also representatives of civil society and concerned public  who are intensively engaged in the announced project for the construction of new power plants in the country.

Control hearing of the highest government representatives is necessary in order deputies of the Assembly of Montenegro to discuss the issue of the economic viability of building a new block in Pljevlja, and whether behind closed doors with the selected bidder – Czech company Skoda Praha – are negotiated funding models and the realization of the project which will be a prelude to allocation of state aid.

Although the Government announces the project of the second block as a strategic investment in the energy sector and claims to be economically viable, until now are hidden from the public basic information to prove those claims, while the researches of MANS and Green Home show that the investment is financially unsustainable and that even commercially viable coal reserves in Pljevlja basin are not enough for the full operation of new power plant.

The Government of Montenegro persistently shows only the cost of building of the second block, for which Skoda Praha offered a price of 338 million euros, but at the same time did not calculate a range of additional expenses, ranging from interest on the loan, the opening of new mines and their re-cultivation, expenses of the expropriation and revitalization of existing thermal power plant, and the cost to health and environmental protection.

Research Center of MANS in previous days announced that the investment costs for the project of the second block will exceed one billion euros, while the international organization Greenpeace in mid-2013 the costs of health and environmental protection for 40 years of operation of the new thermal power plant estimated at 2.5 billion, so the total cost of new “dirty” energy source could reach a whopping sum of 3.5 billion.

The Government the entire project based on incorrect information on the actual commercial coal reserves in the so-called narrow Pljevlja basin from which is planned to secure coal for the new block. Previous data of MANS showed that cost-effective coal is available for only 20 years of operation of the new block, and not 40 years as it is needed the investment to be paid off.

In addition, the Government the controversial project conceived and on manipulative information about the actual price of coal, on which unrealistically projected and the production cost of electricity. MANS research shows that the second block, according to the current price of electricity, would annually produce losses in millions, so it is likely scenario that the Government would maintain it through the allocation of state subsidies.

In this regard are indicative the recent amendments to the Law on Energy in which the exploitation of coal for electricity generation is defined as an activity of public interest, while from the Government recently announced that the project of the second block will be realized in a way that the new company will be formed in which the state will have 51% and EPCG will have 49%. State energy company would then purchased electricity from this new company at the cost principle to a new company in order to make it sustainable, which suggests that it is a model for granting state aid.

Precisely this model of financing the project is intended to implement the Croatian Government regarding the construction of the thermal power plant Plomin C, but recently announced a waiver of it, after Brussels announced that it will launch an investigation into the state aid that Croatia intended to provide for this project.

MANS and Green Home expect that the president of the Committee for Economy and Finance urgently convene a control hearing of the highest Government officials, particularly bearing in mind that Prime Minister Milo Djukanovic is in an apparent conflict of interest, because as Prime Minister decides on the models of realization of the whole project, and moreover because in the project is included the company Rudnik uglja Pljevlja, where his brother Aco Djukanovic has significant ownership.

MANS and Green Home

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