ZAGREB, Aug 8 (Hina) - After several months of negotiations, the Croatian Power Industry (HEP) and the US power group Enron have agreed on five new contracts regulating relations between the two companies in a new way. The contracts
will be signed as a package in two weeks, after they are accepted by the HEP Supervisory Committee and Assembly and approved by the Croatian government, HEP director Ivo Covic and Enron Vice President for Europe Eric Shaw told reporters in Zagreb on Tuesday.
ZAGREB, Aug 8 (Hina) - After several months of negotiations, the
Croatian Power Industry (HEP) and the US power group Enron have
agreed on five new contracts regulating relations between the two
companies in a new way. The contracts will be signed as a package in
two weeks, after they are accepted by the HEP Supervisory Committee
and Assembly and approved by the Croatian government, HEP director
Ivo Covic and Enron Vice President for Europe Eric Shaw told
reporters in Zagreb on Tuesday. #L#
Covic and Shaw signed a letter of consent for the final texts of the
five contracts including: the cancellation of the existing
Contract on the lease of facilities and power production; the
cancellation of the existing Contract on the purchase of
electricity; a new contract on the purchase of electricity; an
amended contract on the right of construction at the Jertovec
location; and a contract on cooperation.
On the basis of the amended Contract on the right of construction at
the Jertovec location, Enron acquires the right to, if it decides
so, build its own power plant at the location. The HEP would have no
financial or other obligations regarding the construction and
management of the plant. The plant would be owned by Enron, whereas
the produced electricity would be sold at the market, Covic and Shaw
said in a joint statement.
The two officials declined to reveal the details of other
contracts, saying their content was confidential and would not be
made public, especially not before they were signed.
The five new contracts will replace the current three contracts,
and Covic and Shaw only revealed the two sides had agreed on new
relations regarding the purchase of electricity. Covic said the HEP
had not been able to accept the offered contracts until now, and
"Enron recently reduced its conditions and offered additional
concessions, which Croatia deemed acceptable."
Shaw added the offered contracts were acceptable for both sides,
and Enron's flexible moves could be understood as the company's
commitment to long-term investments in Croatia's power industry.
This, he said, opens a new era in cooperation between Enron and the
HEP.
With the contract on cooperation, which the two officials called a
contract in principle, the two sides are expressing their intention
to continue and more precisely define their cooperation regarding
power trade, HEP's restructuring before its privatisation,
preparations for HEP's privatisation, and the establishment of a
power market in Croatia.
Answering to reporters' repeated inquiries, Covic and Shaw said no
political pressure had been exercised for the two sides to reach an
agreement before a visit by Croatian President Stipe Mesic and
Prime Minister Ivica Racan to the United States. The negotiating
parties were the HEP and Enron, there was no direct intervention,
but certainly politicians were interested, however not directly,
Shaw said.
(hina) rml