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Subotica decides not to withdraw part of KfW loan

July 14, 2016 | Comments: 0Author:

Subotica

At the local assembly meeting the City of Subotica approved the proposal by public heating utility JKP Subotička toplana not to withdraw EUR 1.7 million, part of a loan provided by KfW Development Bank, portal Subotica.com reported.

The package worth EUR 4.5 million for the heating plant was agreed on in 2012 with the assistance of the Government of Serbia. The loan was intended for the reconstruction of main hot water pipelines, upgrading substations and the system for measuring and monitoring industrial systems (Scada), and the construction of a cogeneration system within the General Hospital.

Heating plant operator JKP Subotička toplana gave up on the financing package that will be redirected to a unit in Belgrade.

According to the explanation of the city parliament’s decision, Subotička toplana has used the loan in the amount of EUR 2.8 million and it is reconstructing the network. Works on the improvement of substations are included in the refurbishment of 30 out of 94 units. However, the idea to improve Scada and to construct a combined heat and power plant in the hospital proved unprofitable after detailed economic analysis, according to the article.

The special analysis for the generation unit led to the conclusion the investment value is increased by 100% compared to the estimated value, while for Scada system it was found that it would not be compatible with the existing software and hardware. The plant upgraded Scada using its own resources in a more favourable way, both in financial and technical terms, said the members of the assembly of Serbia’s northernmost city.

The consultants have proposed to abolish the project as the investment greatly exceeds the earmarked EUR 725,000, said Dervo Ahmetović, manager at Subotička toplana. In consultation with the Ministry of Finance, the money is not used, and it will be redirected to a heating plant in capital Belgrade, he added.