See you in court! BUTEC takes energy ministry to court

See you in court! BUTEC takes energy ministry to court
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Published December 20th, 2012 - 06:41 GMT via

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Beirut-based BUTEC Company is to take the energy ministry to court
Beirut-based BUTEC Company is to take the energy ministry to court
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Beirut-based BUTEC Company intends to file a lawsuit against the Energy Ministry for what it terms a violation of an earlier agreement to allow its Spanish partner company to build a power plant in Deir Ammar near Tripoli, the head of the firm said Wednesday.

“We are planning to file this lawsuit with the Shura Council and then refer the case to the international court. We won’t keep silent on this issue,” Nizar Younis told The Daily Star.

The Cabinet Wednesday agreed to launch another tender to build more power plants to allow more international firms make their bids.

This measure has further irked both BUTEC and its Spanish partner ABENER, which refuses to take part in a new tender.

“This is an abuse of power. We officially won the first tender and now they want to back down from their earlier commitment from the Public Tender Administration which belongs to the Prime Minister’s Office,” Younis said.

He added that the economic price offered by his firm was the lowest among the bidders.

According to Younis, both BUTEC and ABENER offered a price of $.092 per kilowatt if gas is used or $.136 for each kilowatt if another fuel is used to run the plant.

He added that there are two suppliers for the gas turbines.

Siemens and General Electric are the two companies that were supposed to build the gas turbines in Deir Ammar.

“If the government decided to build a power plant under 450 MW capacities then Siemens will build the project but if the state decided to build the plant with a capacity of more than 500 MW then General Electric will do the job,” Younis said.

He stressed that the total cost of the project according to Law 181 is $625 million for the 500 MW plant, adding that his firm offered a 565 MW plant for only $600 million.

“Our megawatt cost was even cheaper than the estimation of Energy Ministry,” Younis said.

The head of BUTEC rejected the claims of the Energy Ministry that they have limited funds for the project.

“In paragraph five in the Energy Ministry’s plan, the government has allocated $1.6 billion for the production and transfer of 700 MW plant,” Younis said.

He insisted that the World Bank had approved the earlier specifications prepared by a Swiss company.

Younis admitted that Energy and Water Minister Gerban Bassil did not sign the contract with his company but has assured the firm that it has won the tender.

He declined to say if the Spanish company will also file a lawsuit against the Energy Ministry.

“Spain is frustrated by the behavior of the Lebanese state on this matter and it seems that they don’t want to get more involved in future projects in this country following this experience,” Younis said.

Al-Liwa newspaper published Wednesday what it called Bassil’s report to the government.

It added that Bassil has asked BUTEC and ABENER to lower the first offer it made to $502 million or he will be compelled to ask the Cabinet to launch a new tender.

The minister had asked BUTEC and ABENER to abandon plans to build unnecessary structures around the plant to reduce cost.

Younis warned that the new tender will take at least 12 months to complete, and this means the actual work will not start for at least two years.

Earlier, Bassil told reporters that Lebanon will have 24 hours of electricity each day if all parties approved his original plan to boost production.

Bassil original plan calls for boosting electricity production to 5,000 MW over the next five years at a cost of $5 billion.

Lebanon is expected to receive two barges to generate electricity from Turkey in four months.

Both barges have a combined capacity of 270 MW only and this would enable Electricite du Liban to reduce power rationing by one to two hours.

But some energy experts believe that the two barges are waste of time and money, noting that the government could have saved millions of dollars if it built two power plants with a capacity of more than 900 MW.

Lebanon has been enduring severe power rationing since 1998 and this problem is expected to get worse in the coming years as consumption grows.

At present, the country’s power plants only generate less than 1,400 MW while the actual need exceeds 2,500 MW.

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