Macedonia cancels hydro power plant tender
* Project cost estimated at up to 700 million euros
* New tender to be announced soon
SKOPJE, Sept 20 (Reuters) - Macedonia has cancelled a tender to award concessions to build two 526-megawatt hydro power plants because the two bids were unacceptable, a spokeswoman for the economy ministry said on Thursday.
PPC, Greece's dominant power utility, and a consortium led by China International Water and Electric Corporation (CWE) had placed bids to build the Cebren and Galiste power plants on the Crna Reka river at an estimated cost of 700 million euros ($914 million).
The offers contained requirements related to guaranteed returns and the size of a potential stake in the joint venture with the government that were unacceptable, said Suzana Pranjic, a ministry spokeswoman.
PPC complied with all tender conditions but offered only a 28 percent stake in the joint venture with Macedonia's state-run utility ELEM, which the government deemed as too low, said Pranjic. CWE offered the utility a 40.5 percent stake.
"The Chinese consortium sought a guaranteed purchase for the entire electricity output at a pre-agreed price, a guaranteed rate of return on investment in the case of poor hydrology, and the inclusion of another hydro plant in a future joint venture," she said.
Hydro power accounts for about a quarter of the power generation in the Balkan region, which has experienced electricity price rises and shortages due to a two-year drought.
Under the tender, the successful bidder would have built the plants in partnership with ELEM and operated them under a 57-year concession.
ELEM operates 1,329 MW of power-generating capacity, of which 60 percent is coal-fired and 40 percent hydro-power.
Pranjic said the government plans to issue a new tender for the construction of the Cebren and Galiste hydro power plants in the near future. ($1 = 0.7658 euros) (Reporting By Maja Zuvela; Editing by Michael Kahn and Alison Birrane)
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