ELEM activates EUR 5.6 million in guarantees from Slovenia’s Riko

The bank guarantees provided by Slovenia’s Riko worth EUR 5.6 million were activated, state-owned power producer ELEM said on April 9. The foreign company failed to meet obligations in the former Yugoslav republic on the construction of a 36.4 MW hydropower plant (HPP), said ELEM, operator of the facility.

St. Petka HPP was officially delivered on a turnkey basis on February 5, 2013, but some of the works which were specified in the tender documentation were not completed within the prescribed period and their quality did not meet the contractor’s requirements, ELEM said in a statement emailed to SeeNews.

Furthermore, Riko failed to remove some of the faults in the HPP’s operation which were identified during the trial period, Energia.gr portal reported. ELEM also said that St. Petka was delivered 270 days later than agreed, which entails penalties in the amount of 10% of the contract value. The construction of the plant was due to be completed by April 2009.

Hydro plant St. Petka’s annual production is 66 GWh of electricity. The project was worth 75 million euro, the Macedonian government said earlier. ELEM operates two thermal power plants and eight hydropower plants.