About 20m euros of punishment if no contract is implemented for TC “New Kosovo”

Currently, Kosovo is without the Parliament and with Government on the run. Meanwhile, the decision to implement the contract with the American company remains to new institutions expected to be formed on the basis of the outcome of the 6 October parliamentary elections.

The Minister of Economic Development in the Exile Government, Valdrin Luka, tells Radio Free Europe that it has until May 2020 to complete the contract.

The “by that time does not present any risks because May is the deadline. Disforming the Government may delay the process, but does not mean it can jeopardise the project. I'm talking about assuming that very soon in December or January we will have the government, and if it lasts for months, then we're in a unfavourable position because there will be no possibility for decision-making”, Luca points out.

The acting minister, Luka, recalls that if the stalling is caused by Kosovo by failing to fulfil its obligations, then the situation will be set, under which the Government of Kosovo will have financial responsibility to the company ʹContour Globalʹa value of 19.7m euros.

However, if Kosovo completes its obligations, but Kkontour Global '%s' fails to secure the financial package, then this company will owe Kosovo a value of 17.5m euros.

The Kosovo government signed the commercial agreement with the American company “Contour Global” at the end of 2017 for the construction of New Kosovo thermal power plant “with a capacity of 500 megawatts, which will cost 1.3 billion euros. This project represents the largest foreign investment in Kosovo.

The state guarantee of the financial package for the construction of the thermocentral plant “New Kosovo” requires 2/3 of the Kosovo deputies' votes.

Construction of the “New Kosovo plant has been consistently rejected by representatives of civil society, who consider it an environmentally harmful project and citizens.

Dardan Abazi, senior researcher at the Institute for Development Policy (INDP), tells Radio Free Europe that the contract for construction of Thermocentral Plant “New Kosova” should be halted even if Kosovo is obliged to pay off financial obligations.

The “for us is clear that the thermocentral plant “New Kosovo has to be interrupted and that we have repeatedly arranged for this thermal power plant not to be built and that contract signed by the government on the run is an harmful contract for citizens. The reality of this contract would cause billions of losses for citizens and is unaffordable for all of us and the Kosovo budget”.

We are, at all costs, even by paying 19m euros, to cut off this contract. But there must be ways that even Contour Globalʹ there is difficulty in finding funding, and in that sense better modes have to be found that, even with no penalisation whatsoever, we can withdraw from this project and get rid of this devastating contract for the energy market”, Abazi estimates.

He says that only by withdrawing from this contract will the energy market be opened and, according to him, a debate should be opened in Kosovo about the future of Kosovo's energy system about how much we need investments in renewable energy sources and how much the energy market should be designed for future generations.

Kosovo's next government's first “should be breaking off this harmful” contract, Abazi says.

Kosovo's future government is expected to be formed on the basis of the coalition between the Vetevendosje Movement, as the winner of the elections and the Democratic League of Kosovo, as the second party. Both of these political subjects disagree with the government's agreement signed on leave with the American company, “Contour Global”.

The Vetevendosje movement has voiced itself against the “Contour Global” and, according to it, this project, as such, will not be realised because the company in question can raise the billed price for spending electricity.

While the Democratic League of Kosovo has indicated it will build new energy capacities, but will reject any investment alternative that costs the final price of electricity 100 per cent.

But, for incumbent Minister Valdrin Luka, the construction of the thermocentral plant “New Kosovo” does not go to Kosovo, as he says Kosovo will continue to import electricity, primarily from Serbia, about 60m euros per year.

Kosovo is important to have new generator capacity for basic electricity. Unplanned electricity cuts are losses to businesses, citizens and our image of foreign investors are not positive, since foreign investors are the first thing they want to have, it's stable electricity”, Luka says.

New Kosovo's <x0 power plant” was meant to start building this year as it becomes operational in 2023. The life span of Thermo power plant “New Kosovo” is estimated to be 40 years.

Kosovo has more than 10 billion tonnes of lignite, and as such, it is the fifth country in the world for the amount of this resources, but with all the property of lignite, Kosovo continues to face a lack of electricity. /rel/