Alstom, which has already told its contractors to start preparing for a possible suspension of the project, had initially planned to withdraw in May but has extended the deadline to 4 June and now by another two weeks.

It says continuation of the works is conditional on a state guarantee for a EUR 440m loan from the European Investment Banks (EIB).

The guarantee bill is in parliament but it was put on the back burner on 23 May when coalition MPs decided to strike it from the agenda of a parliamentary committee due to concerns that the government's conditions for the EUR 1.3bn project were not met.

The conditions - which include the lowering of the total costs of the project, the setting of a deadline for its conclusion, and concrete data on its profitability as well as reduction of CO2 emissions - were set in February, but the government officially inserted them in the guarantee bill in mid-May.

According to TEŠ and its owner, state-controlled power utility HSE, the failure to provide the state guarantee would lead to catastrophic consequences.

TEŠ and HSE claim that this would include at least EUR 2bn in additional costs over the next two years, lower energy sufficiency of Slovenia and consequently higher energy prices, problems in the clean-up of the area the loss of thousands of jobs in the region.

If the parliament fails to provide the loan guarantee, TEŠ and HSE would immediately require financial restructuring, which they say would involve a capital injection for the power utility.

TEŠ has already secured a EUR 110m loan from the EIB, backed with a bank guarantee, and a EUR 200m loan from the European Bank for Reconstruction and Development (EBRD), where a state guarantee was not required.