Euro Insol has canceled contracts worth EUR 71.5mln between Hidroelectrica and Andritz

Hidroelectrica’s official receiver, Euro Insol, yesterday announced that it had canceled the addendums no. 4 and 6 to the refurbishment contract concluded with Andritz Hydro group for Gogosu hydropower station on the Danube. Works are worth EUR 71.5mln, according to a press release. Remus Borza, partner at Euro Insol, stated: “Termination of contracts with Hidroelectrica’s old partners is not an end in itself in the insolvency procedure, but it aims to optimize the company’s investment costs and practice reasonable prices, comparable to similar investments at European level. We would have accepted to pay EUR 50mln for the extension by another life cycle of Gogosu station, but EUR 70mln is a much too high and unjustified cost in the case of a production capacity of only 54MW. At such a cost, we reach EUR 1.3mln/upgraded MW, the equivalent of a newly built MW. The cost of EUR 1.3mln/MWh is even higher if we report it to the cost at which Lotru plant has been upgraded, i.e. EUR 89mln at an installed power of 510MW, thus resulting a price of EUR 174,000/upgraded MW. For 15 years, all the great refurbishments at Hidroelectrica have been given directly to the same consortium of companies Voith – Andritz. Euro Insol decided that all the future upgrade works will be awarded by international tender”.