Romania's biggest electricity producer, Hidroelectrica, obtained in Court RON 16.6 mln compensations from VA Tech Hydro (currently Andriz), Economica.net reported.

The compensations are related to a major refurbishment contract at the Iron Gates 1 (Portile de Fier 1) hydropower plant on the Danube. However, the sum is only 1% of the RON 1.6 bln asked by Hidroelectrica.

Furthermore, the Romanian company also has to pay some RON 4.5 mln to the contractor for operations related to the guarantees.

Hidroelectrica reportedly initiated another lawsuit against the contractor to get the remaining RON 1.58 bln. The contract between the Swiss company Sulzer Hydro, (later VA Tech Hydro, later Andritz) and Hidroelectrica for the modernization of the Iron Gates hydroelectric power plants is one of the most controversial in Romania's recent economic history.

The contract for refurbishing Iron Gates 1 was awarded in 1997, for USD 150 million, with no competitive procedures. The contractor then increased the sum.

The same happened with the other contract assigned to the same company, Sulzer / Va Tech, for the modernization of the Iron Gates 2 hydropower plant.

Eventually, Hidroelectrica paid EUR 1.1 billion for the refurbishment of the Iron Gates plants and ended with worse equipment than before, claimed Remus Borza in 2016 - when a local court appointed him to manage the company's insolvency procedures.

The price per MW paid for the modernization of Iron Gates was ten times higher than that paid for contracts attributed under competitive procedures, he explained at that time.

(Photo: Shutterstock)

andrei@romania-insider.com