The remarks of the Minister of Mining and Energy Zorana Mihajlovic against the Chinese contractor on the construction of block B3 in the Thermal Power Plant “Kostolac B”, which is late with the construction, are completely justified because there is no objective reason to prolong the project, according to the expert public in Serbia.
The Minister of Mining and Energy, Zorana Mihajlovic, stated recently, in a conversation with the representatives of the Chinese company CMEC, that the current dynamics of works on the construction of Block B3 in the thermal power plant in Kostolac is inadmissible, emphasizing that it is one of the largest construction sites in the energy sector. She was dissatisfied with the announcement that the completion of the works would be moved to the end of 2022, as well as their quality. Minister Mihajlovic pointed this out in a conversation with the main representative of the Chinese company CMEC, Li Suekiang, and the general director of the CMEC representative office in Serbia, Ren Kailong.
– The current dynamics and delays with the Kostolac B3 project do not benefit anyone. The Serbian side is here, we will not stand by and observe the realization of the project, we will work even harder to help you, but you must invest more effort and work, to compensate for the delays, because the realization so far is unacceptable, and there is no compromise on quality – she said on that occasion. She insisted that the level of monthly realization of the project be accelerated as much as possible in order to reach a satisfactory level by July, and pointed out that the Chinese company must work in accordance with international standards and contractual obligations.
After introducing the representatives of the Chinese contractor to his criticism, the General Director of CMEC in Serbia, Ren Kailong pointed out that he expects that the project will be completed not by the end but by autumn 2022, and that the company will work in accordance with the agreed requirements and obligations and will make additional efforts to deliver the equipment.
The Vice President of the Construction Chamber of Serbia, Goran Rodic, points out for Danas that the criticism of Minister Zorana Mihajlovic is completely in place and that the CMEC pandemic of the corona virus cannot be a relevant excuse for the delay in performing the works.
– The Chinese take our companies for subcontracting. Therefore, the corona virus is not an obstacle for workers to find themselves. The problem is that CMEC is looking to hire labor, that is, it hires subcontractors as cheaply as possible in order to collect as much profit as possible from the construction of block B3 in Kostolac. Due to that, there are not enough workers and those who are there are poorly paid, so they are not interested in meeting the set deadlines. That is definitely not acceptable and Minister Mihajlović is right to criticize the Chinese. They must hire capable subcontractors and hire enough manpower to meet the deadlines they have committed to in the contract. In that sense, we should not accept any additional deadlines and prolongation of the completion of that work – our interlocutor states.
When it comes to the poor quality of materials and the lack of necessary equipment to build a new thermoblock, Rodic states that CMEC is strictly obliged to adhere to the quality standards of materials and equipment envisaged by the project.
– It is also a contractual obligation that the Chinese have undertaken and they must abide by it. They are obliged to provide the equipment provided by the project and which must be of an appropriate standard. Nothing below that quality and standard when it comes to materials and equipment should be accepted and the company CMEC should be asked to adhere to the agreement – Rodic points out.
The Chinese company CMEC laid the foundation stone for the construction of a new, third block in the Thermal Power Plant “Kostolac B”, with a capacity of 350 megawatts, on November 20, 2017, and the expected annual electricity production of that plant is about 2.5 billion kilowatt hours. The value of the works is 613 million dollars, and they started with the construction of chimneys and systems for chemical water preparation. Block B3 in Kostolac is the first thermoblock to be built in Serbia since 1991, and when it is completed, it will make up five percent of the total installed electric power capacities in Serbia. The construction of block B3 is part of the second phase of the project with an increase in the production of the Drmno mine from nine to 12 million tons of coal per year in order to provide sufficient quantities of coal for the new block. The total value of the second phase of the modernization project of the Thermal Power Plant “Kostolac B” is 715.6 million dollars.
China’s Exim Bank provided 85% of the funds for financing the project, and 15% for the Electric Power Industry of Serbia. The repayment period is 20 years, including a grace period of seven years, and the fixed interest rate is 2.5 percent per year. The construction of the new Kostolac B3 thermoblock is planned according to the strictest European standards and technical regulations. In TPP “Kostolac B”, within the first phase of the project, the revitalization of blocks B1 and B2, which now produce electricity with a capacity of 700 megawatts, was completed, and a new plant for desulphurization of flue gases was built, Danas reports.
