In 2008, the company, which is now insolvent for the second time, had commissioned another study for which it had paid almost EUR410,000. Tarnita has at least five feasibility studies, environmental impact studies, consultancy for finding investors drawn up for it but construction of the plant has yet to start 30 years after having first been discussed.
Hidroelectrica is not the only example, though, as reactors 3 and 4 of the Cernavoda nuclear power plant are another project with ‘tons’ of feasibility studies conducted for it. Consultants say they did their job, while companies would not answer.
A 14.5 million lei (EUR3.24 million) contract signed between Hidroelectrica and Deloitte Consultanta in 2010 was completed at the beginning of this year. Upon completion of the contract, a commercial company was supposed to exist and supervise the investment in the Tarnita-Lapusesti hydropower plant, and a list of selected investors should have been put together.
There are no investors, but Hidroelectrica awarded two more contracts in February. One of them is for an update of the feasibility study for the hydropower plant worth EUR44,000, which Institutul de Studii si Proiectari Hidroenergetice Project Development won, and the other is for an environmental impact survey, worth EUR4,500, which Cluj-based Unitatea de Suport pentru Integrare won, according to the announcement on the electronic public procurement website e-licitatie.ro
“The contract between Hidroelectrica and the consortium of Deloitte Consultanta SRL, Banca Comerciala Romana and Hydrochina Zhongnan was signed in 2010. A press release was issued at the time and the information is publicly available,” say the representatives of Deloitte.
“The contract was completed and Deloitte supplied what it committed to supply under the contract. “
The contract said investors for the project had to be selected and a commercial company established to oversee the investment in the Tarnita power plant.
Information about the progress of the project is available on the www.tarnita-lapusesti.ro website and any other details about the contract are confidential under the contract with the client, Deloitte officials added.
In February, Hidroelectrica signed another agreement with Deloitte for financial audit services, this time worth EUR88,000.
The website shows that the RON14.5 million contract paid for a review of the legislative framework, a review of an older feasibility study, the drafting of a new financial model for the power plant and the marketing of the project, among others.
The same website says feasibility studies were conducted in 1994, 1999, 2007, 2008. A new such study is now being updated. Hidroelectrica officials did not return ZF’s calls for comment.
Hidroelectrica budgeted RON247 million net profit for this year, 3.6 times lower than the record high profit of RON910 million in 2013 and says layoffs will continue after the company fired more than 1,100 people after it first entered insolvency proceedings in June 2012. Company officials have recently said they are trying to find financing to upgrade their major hydropower plants.
Tarnita is not the only project that has not made much progress in the last few years other than a lot of feasibility studies.
Reactors 3 and 4 of the Cernavoda power plant were supposed to cost EUR2 billion, and then the cost doubled to EUR4 billion only to increase again, this time to EUR6.5 billion, under a new feasibility study.
According to e-licitatie.ro data, EnergoNuclear, the project company for reactors 3 and 4 spent EUR30 million on consultancy or feasibility studies in 2009-2012. EnergoNuclear officials were unavailable for comment.
The latest feasibility study, worth almost EUR381,000 was devised by Ernst&Young and says the two reactors should cost EUR6.5 billion.
Royal Bank of Scotland collected more than EUR4 million for financial consultancy services in 2010, Tractebel Engineering got about EUR8 million for engineering services and Atomic Energy of Canada received EUR8.5 million for nuclear security consultancy.
Nuclearelectrica’s officials did not return ZF’s calls for comment.
Reactors 3 and 4 of the Cernavoda power plant are looking for an investor as all the energy groups interested in the project have backed out. Those that were once interested are CEZ (Czech Republic), Enel (Italy), RWE (Germany), GDF SUEZ (French-Belgian group), Iberdrola (Spain) and ArcelorMittal Galati.
Tarnita-Lapusesti hydropower plant and the two new reactors in Cernavoda are the biggest energy projects of Romania included in the Ponta government program. They are worth EUR7.5 billion together.
(English version by Loredana Fratila-Cristescu)