Exclusive: Dan Laurentiu Ciurel, General Director of Complex Energetic Oltenia (largest state-owned coal energy producer), wastes hundreds of EUR millions and jeopardizes 20,000 jobs
Postat la: 14.02.2014 - 10:55 | Scris de: Ziua News
Romania lost EUR 170 millions from the EBRD (European Bank for Reconstruction and Development) because of the General Director of Complex Energetic Oltenia, plus EUR 4 millions in fees for not using the EBRD loan.
By Ruana Ceausescu
Ciurel delayed for 18 months, without any real reason, the announcement of a public bid winner essential for Romania's energy system. As of November 2012, the technical committee decided over the company selected to run the modernization works for Turceni Unit 6; nevertheless, Ciurel and his entourage attempted to grant the project to the other company involved, despite the winning offer being EUR 5.2 million cheaper for Romania! The agreement has not signed up to this moment, leading to a devastating social effect of this failed business: approximately 20,000 people risk losing their jobs. The authorities currently attempt to obtain a new EBRD loan worth EUR 200 millions. ZIUAnews presents below how European money has been lost, as well as important businessmen and politicians who are involved in the failure.
Business blocked before signing the agreement
The Turceni Thermal Power Plant management started as early as 2006 negotiations with the EBRD to obtain financing for the modernization of Unit 3 and Unit 6. The negotiations were delayed in a unjustified manner. In February 2009 Ionel Mantog, General Director of Turceni Thermal Power Plant, restarted the EBRD negotiations for only one unit of the power plant and eventually obtained an EUR 170 million ten-year loan, with a three year grace period, the total value of the project being EUR 224 millions. The Turceni Thermal Power Plant management also carried negotiations for an EUR 150 million EBRD financing for the modernization of Unit 3, only to be stopped in 2010 when it was decided to re-organize the state-owned energy companies into two energy giants, Electra and Hidroenergetica. In 2011 Complexul Energetic Oltenia (CEO) was established by the merger of five companies, among which the Turceni Thermal Power Plant
Only 34 months after the EUR 170 million loan was granted, on May 22 2012, the bid results were made public, keeping only two companies in the race: Babcock Borsig Steinmueller (BBS) and the consortium made of Hitachi Power Europe GmbH (Germany)- Hitachi Ltd (Japan)- Romelectro (Romania).
From May to September clarification meetings were held, being finalised in November 2012. Meanwhile, in September 2012, Dan Laurentiu Ciurel was appointed General Director of Complexul Energetic Oltenia. The report drafted by the offer analysis technical committee and the report of a German consultant paid with EUR 1.5 million by Romania designated the same winner, Babcock Borsig Steinmueller. Nevertheless, the agreement with BBS has not been signed to this moment, while Ciurel and his entourage do everything in their power to assign the agreement to Hitachi-Romelectro.
The Turceni TPP General Manager, former Romelectro employee
The Turceni Thermal Power Plant, where the unit to be modernized is located, has been run by Corneliu Ditescu since March 2013. Ditescu was previously an employee of Romelectro Craiova. Mr. Ditescu declared for ZIUAnews that he is not involved in establishing the public bid winner and thus unable to influence the decisions related hereto. Nevertheless, ZIUAnews was informed by inside sources that the General Manager of Turceni TPP, along with Laviniu Danciu, ordered the technical sub-committee to reassess the offers, suggesting that the new report should not rank the offers but merely present them in brief. They also suggested the committee to avoid the cost analysis, making it possible to conceal that BBS is the actual public bid winner. Their suggestions come to contradict the previous reports of the committee and of the German consultant.
Ioan Mihaila's involvement in the business
According to internal sources, Ioan Mihaila, former CE Oltenia Supervisory Board member, is not exactly a stranger to this business. Just like Ciurel, Ditescu and Danciu, Mihaila pulled some strings so as Hitachi-Romelectro would win the public bid, despite the potential risk of the BBS Germans starting a lawsuit against Romania.
Ioan Mihaila is currently detained for corruption deeds after Remus Vulpescu denounced him for an EUR 1.4 million bribery attempt so as Vulpescu would favour a certain company for a Hidroelectrica organized public bid.
Ciurel claims the EBRD fees are too high
ZIUAnews sent a written request to the CE Oltenia management, namely to Dan Laurentiu Ciurel, to enquire about the status of the public bid, considering that a new negotiation has been started with EBRD for a new loan. We were answered that "there is no legal date by which a winner should be announced" and "no winner shall be announced prior to consolidating the financing, given that EBRD is currently trying to impose terms and conditions impossible to accept by the company or the Ministry of Energy (the financing terms, like interest rates and fees are above the market average at this moment)".
On the other hand, the EBRD representatives specified for ZIUAnews that the project for Turceni TPP Unit 6 rehabilitation and modernization has already been approved, with a value of EUR 200 millions. The project team currently carries negotiations with the Romanian parties involved in order to finalise and enforce the agreement. ZIUAnews recently exposed that the EBRD representatives demanded a position in the Turceni technical committee as a mandatory condition for granting the loan.
Four requests to extend the offer submission date
The public bid winner should have been announced by the end of 2012 or by the end of January 2013 at the latest. All technical clarifications were completed by November 2012. However, no winner has been announced by this moment. The representatives of CE Oltenia run by Ciurel asked the two bid participants to extend their offers and bid bonds four times.The first extension was request in September 2012 to last until January 20 2013. In November 2012 the German company asked the CE Oltenia management to make public the date when the bid winner is announced, as they would have to decide on their 2013 budget, expenses and projects.
The second extension request was in January 2013 and the third in April 2013, when Laviniu Danciu informed the German company representatives that adjustments have been made in the CE Oltenia structure and on the EBRD refinancing terms. Laviniu Danciu also mentioned that a final assessment report would be sent to the EBRD by the end of June. Thus, a fourth extension date for the offer was requested, planning to announce the public bid winner in September.
Irrelevant and useless work visits
The direct subordinates of Ciurel who are members of the award committee run by Laviniu Danciu decided to visit several thermal power plants built by the candidate companies situated abroad and thus add new expenses for the Romanian state, despite having the final report of the independent consultant.
Although in theory the committee members wanted to visit thermal power plants similar to Turceni, things were different and the committee members visited four thermal plants: three in one day only and the remaining other in three days, namely the Neurath thermal plant built by Romelectro and Hitachi. ZIUAnews specifies that the equipment used in Neurath is different from the Turceni equipment, thus making the visit irrelevant and the other parties suspicious. In fact, no reference of Romelectro-Hitachi is relevant for the CE Oltenia project as no similar work has been carried for thermal plants that use the same type of coal.
Digits and numbers - lost in translation
As for the energy consumption, the Hitachi representatives lost their way in translating the numbers. The Romelectro-Hitachi representatives presented in their bid offer an energy consumption of 13,420 kW, while the BBS representatives proposed 13,000 kW. They found the excuse of human error during the repeated German to English and English to Romanian translation. More, Hitachi was unable to come up with a list of consumers who generate their own consumption. The Hitachi offer was considered undervalued and a penalty clause was introduced in the tenderbook. BBS proposed 13,000 kW and presented a detailed consumer list, thus becoming the actual winner.
EUR 5.2 million savings
As for the execution time, Hitachi-Romelectro claimed to be able to complete the project in 36 months, while the BBS claimed the modernization works would be carried out in 32 months, which actually means EUR 4 million savings (one million for each month). The exploitation cost for Hitachi-Romelectro is an additional EUR 1,718,388.75 and nill for BBS. Hitachi established a unit efficacy of 88.6% while BBS 89%, thus the BBS offer saving EUR 1 million while the Hitachi offer saving EUR 200,000. In fact, the general Hitachi offer was EUR 151,570,457.75 while the general BBS offer EUR 146,848,586.90, the EUR 5.2 million representing potential savings of the Romanian state.
Despite all the reports of the technical committee and of the German consultant, all considering the BBS offer superior, the General Director Dan Laurentiu Ciurel blocked this extremely important project for CE Oltenia, the only explanation being that strings are pulled in favour of Romelectro. Material and social costs, they are all ignorred and deepened by the repeated delays of General Director Dan Laurentiu Ciurel.
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