After negotiations with the Chinese contractor, Elektroprivreda BiH returned the entire advance payment in the amount of 247,942,571 BAM, and after terminating the Contract for the construction of Block 7 in the Tuzla Thermal Power Plant.
Although there was great public interest in the status of the Block 7 project, the Management of Elektroprivreda BiH states that in order to efficiently conduct negotiations and protect the interests of the company, it is cautious in releasing information to the public, and in the meantime, conditions have been created for communicating the results of the negotiations so far and preventing disinformation.
They remind that the Contract for Engineering, Procurement and Construction – EPC for Block 7 – 450 MW in the Tuzla Thermal Power Plant, worth more than 1.4 billion BAM, was concluded in August 2014 with the Chinese contractors China Gezhouba Group Company Ltd. and China Energy Engineering Group Guangdong Electric Power Design Institute Co. Ltd.
In June 2020, Elektroprivreda BiH paid the contractor an advance payment of 247,942,571 BAM. However, in August 2020, the contractor informed Elektroprivreda BiH of the alleged inability to fulfill the Contract because it failed to procure equipment from the key equipment supplier General Electric.
Given that the contractor had not fulfilled its contractual obligations by January 2023, nor had it offered an alternative solution that would meet the contracted conditions, the previous Management of Elektroprivreda BiH, with the consent of the previous Government of the Federation of Bosnia and Herzegovina, sent the contractor three reminders before terminating the Contract. The last, third reminder before terminating the Contract was sent in July 2023, giving the contractor a 90-day deadline to fulfill its obligations.
After taking office in August 2023, the current Management of Elektroprivreda BiH hired a renowned international legal team with the aim of providing legal services and adequately protecting the interests of Elektroprivreda BiH. Taking into account the current situation and the fact that the contractor did not fulfill the contractual obligations even after the expiration of the deadline for the third warning, the Management of Elektroprivreda BiH terminated the Contract in December 2023, with the prior consent of the Government of the Federation of Bosnia and Herzegovina, and immediately initiated the procedure for amicable resolution of outstanding issues.
After several months of negotiations, Elektroprivreda BiH returned the entire advance payment in the amount of 247,942,571.00 BAM from the contractor.
“Recognizing the complexity and importance of the project in question, the Management of Elektroprivreda BiH, in cooperation with the legal team, continues to actively take the necessary steps to protect the rights and interests of Elektroprivreda BiH. The public will be informed in a timely manner about further activities regarding this issue,” EPBiH announced.
