Austrian Strabag AG has decided to withdraw from the project of construction of the hydropower plant Vranduk in Bosnia and Herzegovina, local and regional media reported.
Member of the consortium which won the international tender for the construction of the HPP Vranduk, Croatian Končar – KET confirmed that Strabag has requested to increase the agreed price during the preparatory phase and that consequently both parties have announced the termination of the contract, SEEbiz portal reported.
In the meantime, Strabag has sent a request for termination of the agreement, Končar said, adding that negotiations are still in progress.
Bosnian power utility Elektroprivreda Bosne i Hercegovine (EPBiH) signed a contract with companies Strabag AG Austria and Končar KET, worth EUR 57.4 million, in January 2016. The agreement foresees preparation of project documentation, production, delivery and installation of equipment, construction works, testing and commissioning of the plant.
The construction of HPP Vranduk on the river Bosna was launched in September 2016. It was announced that the works should be completed in November 2019.
The HPP with installed capacity of 19.6 MW would produce 100 GWh of electricity annually, which would increase the share of electricity from renewable sources and contribute to reduction of the CO2 emissions.
The funds for the project have been secured from Elektroprivreda BiH and loans from the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD).
However, from the beginning the project faced problems with the implementation of the contract. The delivery of project documentation was delayed and additional costs of EUR 6,6 million were reported.