Montenegrins criticise plan to bypass tender procedure in Pljevlja II coal plant procurement

Montenegrin NGOs Green Home and MANS have today sharply criticised Montenegrin government plans to choose a strategic partner for the EUR 300 million, 220 MW Pljevlja II lignite power plant [1] without conducting a proper tender. Instead the government has stated that it plans to sign an intergovernmental agreement and enact a special law on the project [2], thus signalling, according to the groups, that it plans to use a loophole in the law to avoid a tender procedure. [3]

The groups are also expressing concern about the environmental impacts of the construction of a new lignite power plant in Montenegro's most polluted town, where a 210MW lignite-fired power plant is already operating.

The government has received preliminary offers for the project from five Chinese companies and three central European ones [4].

"The government's abrupt statement that it will not hold a regular tender procedure and will decide on the investor, pass a special law and sign an intergovernmental agreement by the end of the year raises suspicions that deals have already been made behind closed doors," said Ines Mrdovic of anti-corruption watchdog group MANS. "There is no good reason why this project should bypass regular procedures and be served up as a fait accompli when its benefits to the public have not been proven," she added.

"There is also no clarity about what environmental and social costs will be borne by the investor and what will be subsidised by the public," added Jelena Marojevic of environmental group Green Home. "Nothing has been said about how much expropriation will cost, or environmental protection measures, or decommissioning and rehabilitation of the existing facilities, and who will pay," she continued.

Further doubt of the project's value to the Montenegrin public has been cast by government admissions that the electricity from Pljevlja II may be intended for export to Italy rather than covering Montenegro's own needs. [5]

Green Home and MANS are asking the Montenegrin government to publish an analysis of the economic justification, public interest and financial sustainability of the project, as well as an analysis of the health impacts of the new plant on Pljevlja's already heavily pollution-impacted population before taking any decisions on Pljevlja II. It is found appropriate to continue with the project a regular tender procedure must be conducted.

For more information contact:

Jelena Marojevic
Green Home
jelena.marojevic AT greenhome.co.me

Ines Mrdovic
MANS
ines.mrdovic AT mans.co.me

Pippa Gallop
CEE Bankwatch Network
pippa.gallop AT bankwatch.org

Notes for editors:

[1] The Montenegro government and utility Elektroprivreda Crne Gore (EPCG) plan to construct a new 220 MW lignite plant at the site of the existing Pljevlja lignite power plant in Montenegro's northernmost and most polluted town, Pljevlja. The plant would use lignite from the nearby Pljevlja mine. The process of finding a strategic investor is currently ongoing and several informal offers have been received (see note 4), notably from several Chinese companies.

[2] The further planned process is outlined at http://www.gov.me/sjednice_vlade/27 Item 22, p.8 and http://www.gov.me/sjednice_vlade/28 Item 1, p. 12-13 (both items in Montenegrin language), the latter of which states "Bearing in mind that the Working Group has examined all aspects of the project that it has withdrawn from publication of a tender due to its very difficult implementation, the following activities are proposed."

[3] According to the Montenegrin Law on Public Procurement, it is allowed to avoid a tender procedure and sign an intergovernmental agreement on a project if the project is declared to be a project of special public interest.

[4] Chinese companies:

China Machinery Engineering Corporation (CMEC)
China Gezouba Group International Engineering Company (CGGC)
China Environmental Energy Holdings CO. LTD. (CEE HOLDINGS)
Powerchina - Hubei Electric Power Survey & Design Institute
China National Electric Engineering Co. Ltd., CNEEC

European companies:

Skoda Praha, Czech Republic,
Istroenergo Group IEG, Slovakia
'Mixed consortium of firms' Poland

Rusatom Overseas from Russia and SNC - Lavalin International from Canada also showed interest but did not submit offers.

[5] http://www.gov.me/sjednice_vlade/28 p. 72 and 73