The Romanian gas company Romgaz (SNG) informed investors about the termination of the contract for the 430MW Iernut gas-fired power plant, motivated by the non-completion in time, by the Executor, of the construction works and commissioning.

The statement comes two months and a half after Romgaz announced, on April 4, the imminent termination of the contract signed in 2016 with the association Duro Felguera (Spain) - Romelectro (Romania).

The decision has been repeatedly postponed.

In the meantime, the Government obtained from the European Commission the permit to prolong the project until the end of June 2022.

The permit was necessary because the Government is extending a RON 320 mln (EUR 64 mln) state aid for the project, initially estimated to cost EUR 268 mln.

Romgaz said that it could complete the project on its own.

Duro Felguera proposed Romgaz a calendar for the commissioning of 210MW by the end of the year and the rest up to 430MW by the end of April 2022, but they asked EUR 17 mln in supplementary expenditures - incurred as a result of higher labor cost.

The Spanish company argues that the delay was caused by the pandemic. The project should have been commissioned in early 2020. 

(Photo: Romgaz Facebook Page)

andrei@romania-insider.com