Romania's Romgaz gives contractor one more chance to finish 430MW power plant

Romanian state-controlled natural gas company Romgaz (SNG) suspended for 14 days the termination notification it previously sent to the consortium working on a new 430MW gas power plant at CTE Iernut, the company said in a note to investors.

The contractor is a consortium formed by the Spanish group Duro Felguera and its Romanian partner Romelectro.

Romgaz announced it terminated the contract on April 2, following the contractor’s failure to deliver the works in due time.

While the contract termination notification is suspended, the contractor shall submit an actual proposal for finalizing the works and putting the investment into service as soon as possible. Romgaz will analyze the proposal and decide what to do next, the company’s April 9 note reads.

According to Profit.ro, the two lawsuits opened by the contractor on April 6, determined Romgaz to suspend the termination decision.

The same source discloses details of what seems to be a more complex negotiation process between Romgaz and the contractor. On December 22, 2020, the contractor sent a note requesting an extension of the deadline and substantial additional costs. On December 30, 2020, Romgaz communicated the non-renewal decision and notified the contractor that it would have to pay penalties according to the contract, starting with December 27, 2020, until the effective fulfillment of obligations.

In January 2021, unnamed officials of the Spanish group Duro Felguera expressed their conviction that they would finally manage to reach a deal with the Romanian Government, which controls Romgaz, to obtain an extension of the works contract. They blamed the Romanian parliamentary elections for failing to reach an agreement in this regard with the Executive in 2020 and said that they expected support from the minister of energy Virgil Popescu, who maintained his position after the elections.

(Photo source: Facebook/Romgaz)