The power plant in Romania, which does not end / how it will be terminated for the second time, in five years, the contract for the construction of the Iernut plant

Bogdan Ivan, the Minister of Energy, announced on Wednesday, in the Government, that he is “determined” to terminate the contract with the Spaniards from Duro Felguera, the builder of the 430 MW central in Iernut. Bogdan Ivan also said that he will also execute the guarantee of good execution, its value being of tens of millions of lei.

• The state company Romgaz signed the contract with Duro Felguero in 2016. In 2021 it was terminated once, because Duro Felguero did not fulfill its contractual obligations.
• In the spring of last year, a new contract was signed, also with Duro Felguero, and this time did not carry out the contractual obligations. In addition, the creditors demanded the insolvency of the Spanish company.
• The boiler had to be completed in 2020.
• HotNews.ro showed at the time of signing that Duro Felguera was investigated in Spain in a case of corruption, which stretched to Venezuela.

It is not clear how much of the boiler has been realized

The representatives of Romgaz and the former Minister of Energy Sebastian Burduja, in May, claimed that the works were carried out in a proportion of 97-98%. Bogdan Ivan said, however, that there remained “a rest of execution” of less than 10% and for the completion of the works it would be necessary for another 6-9 months.

Asked by the Hotnews reporter, which is the reality related to the degree of execution, the Minister of Energy replied that “now it is analyzed as much as”, the analysis being done on the spot, “not from the office, from Bucharest”.

Why was a new contract signed with Duro Felguera, after the first termination

In 2016, Romgaz concluded with the association made up of the Spaniards from Duro Felguera and the Romanian Company Romelectro the contract regarding the realization of a new boiler with a cycle combined with gas turbines from Iernut, of 430 MW, a contract that provided for the design, the delivery of the equipment, the execution of the works and the commissioning for the amount of 268 million euros.

This contract has been controversial from the beginning. HotNews.ro showed at the time of signing that Duro Felguera was investigated in Spain in a case of corruption, which stretched to Venezuela.

Also, Romelectro was known as a company subscribed to large contracts with state energy companies. Meanwhile, Romelectro has been insolvency.

The Romgaz evaluation commission sent to HotNews.ro, in 2016, after signing the contract, that he did not know that Duro Felguera is investigated in Spain for money laundering and bribe.

In 2021, the contract was terminated. The reason invoked by Romgaz was “the constant violation of the contractual obligations assumed by the association, this failure to establish the works within the established term”. The deadline was December 26, 2020.

In the spring of last year, Romgaz signed a new contract for resuming the works with the same Spanish company, Duro Felguera, invoking the reason that the works are ready in 90%, and the choice of another builder would have meant extra delays.

After five years of delays it is not clear when work will be completed

At the end of July 2024, “the total progress of the execution of the investment” (progress composed of the execution of the initial works contract + the execution of the new works contract) is about 91%”, it was shown in a document of Romgaz.

Since last year, Romgaz shareholders, the Ministry of Energy being mostly, have decided several postponements to complete the boiler. At this moment, it is not clear a new deadline for completing the works.