CET - Iaşi Pays Over 22 Mio USD For Coal - 01.07.2009

Doru Mocanu,

IaŞi

The Thermo-Electric Power Plant (CET) Iaşi has signed the contracts with the suppliers that won the tender for procuring the coal required for the 2009 - 2010 cold season. Iuganord SRL (the Republic of Moldova) and Trans Nafta Ltd. (Great Britain) will deliver 100,000 tons of black coal each to Iasi for the price of 112 USD/tonne, which is half as much as the price paid for coal last winter. The full quantity of coal required to ensure household heating next winter will cost 22.4 million USD. CET Iasi paid over 27.8 million USD for the 115,000 tonnes used last winter as the procurement price last year was 242 USD/tonne.

The tender was announced in early April, when CET Iasi sent 69 invitations to tender to various companies, embassies and consulates. Only 10 companies submitted bids and only 6 of them met the eligibility and technical criteria. Only three bidders were left in the final phase of the tendering process: Iuganord Grup SRL (R. Moldova), who bade for 60,000 tonnes, Trans Nafta Ltd (Great Britain), who bade for 100,000 tonnes and Izvorul Mariei SRL - Iaşi, who bade for 40,000 tonnes. The first two companies aligned their bid to the smallest price, namely 112 USD/tonne, while Izvorul Mariei SRL requested 123 USD/tonne. Eventually, Iuganord Grup SRL agreed to increase their bid by 40,000 tonnes and became one of the two winning bidders.

According to the deliveries and payment schedule, the first black coal deliveries should reach Iaşi in July. Iuganord will deliver a first shipment of 12,000 tonnes, while Trans Nafta will make an initial delivery of 5,000 tonnes. Each of the two suppliers will deliver up to 25,000 tonnes in August, September, October and November. As for payment, CET Iaşi will pay for the deliveries made in the first three months after 150 days and for the deliveries made in October and November after 90 days.

CET Iaşi will lay off approximately 200 employees by the end of the year. The measure is determined by the financial difficulties caused by the current crisis, as well as by a decrease in the staffing requirements, following the commissioning of superior installations. The first 74 employees will leave by the end of August. Further layoffs of up to 29 persons per month will follow until the end of the year. CET Iaşi currently has 1,446 employees. Individual layoffs started in 2007 and were stopped in the Spring of 2008 for financial reasons. According to the framework labour agreement, CET Iaşi is required to pay severance of up to 20 monthly salaries to each employee they fire.