Lebanon Businessnews News

Bassil seeks higher discount on Deir Amar plant deal
Abener-Butec agrees to trim cost by ten percent
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The Spanish embassy said negotiations between Abener-Butec and the Ministry of Energy and Water (MoEW) are still ongoing for the Deir Amar power plant tender.

Abener-Butec, a partnership between Spanish firm Abener and local firm Butec, previously won the tender. The MoEW was reconsidering the deal due to insufficient funds. Minister of Energy and Water Gebran Bassil did not sign the contract and has called for more negotiations to lower the price. He said the ministry would rerun the tender if the company refused to reduce the size and cost of the deal.

Selim Ghosh, commercial manager at Butec, said “through the book of conditions, the administration (MoEW) has the right to reduce the works and thus reduce the price by up to ten percent.” Abener-Butec had offered to build a 535 MW plant for $660 million. The MoEW asked to downsize the capacity of the plant to 450 MW, and consequently cut the costs down to $500 million.

Ghosh said the consortium was willing to abide by the conditions. Abener said it was willing to reduce the cost of the deal by up to ten percent, but the ministry is seeking to further cut costs. “We can’t go on reducing works as much as they are asking without guaranteeing it would not affect the efficiency of the power plant,” said Ghosh.

The new plant will boost the total output of the Deir Amar facility which currently provides some 430 MW. It will cover almost 25 percent of the country’s power shortage, said Ghosh. If the plant’s capacity was downsized, he said, the production cost per unit will be higher on the long run. The cost of output for the proposed plant would be $0.136 per one kilowatt-hour. The intended power plant can work on three types of fuel, heavy fuel, liquid gas, and diesel.

“The new plant will be able to produce 350 MW of energy within just 18 months from the commencement of the project,” said Ghosh. This capacity, he said, will rise to 525 MW after nine months, to ultimately reach around 560 MW.

“I guess the government could spare some $80 million to serve the country’s electricity needs, especially that the law allows diverting some funds from one project to another (within the $1.2 billion energy plan),” said Ghosh.
Reported by Hanadi Chami
Date Posted: Nov 30, 2012
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