Lebanon Businessnews News

Zouk and Jieh plant construction resumes
Delivery expected early next year
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The Government has issued two of the four payments owed to Danish firm Burmeister & Wain Scandinavian Contractor (BWSC) to conclude construction on the Zouk and Jieh power plants.

The Ministry of Finance (MoF) signed off on the $40 million that will be used to complete the remaining 15 percent of the works. The State will still have to pay the remaining two overdue installments worth $60 million. Seven out of 12 payments have been made so far.

The completion of the plants was expected this month but the delays have pushed the deadline to the first quarter of 2015. The firm was promised that the two overdue payments will be made by the end of the year, and the rest according to the schedule.

The payments that are eight months overdue had been withheld by the MoF, which claimed that changes had been made to the contract. The Denmark-based Export Credit Fund (EKF) allocated funds for the $350 million project. These funds are available in an HSBC escrow account. Without the MoF’s signature, the payments cannot be transferred.

BWSC had won a tender in 2012 to build the two plants in order to generate a combined 270 MW. The Government owes $275,000 for each day of delay, which amounted to $61 million by the end of November. The question of whether to pay the fines will be subject to negotiation between the two sides, according to a source at the Ministry of Energy and Water.
Reported by Yassmine Alieh
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Date Posted: Nov 26, 2014