Thermo Plant TEŠ 6: Showcase of Catastrophic Corporate Governance


Assuming that the Velenje coal mine would supply coal at a price of EUR 2.25 per gigajoule in 2014-2016, the coal mine operator Premogovnik Velenje would break even.

However, this assumes significant disinvestment: EUR 10.5m in 2014, EUR 14.5m in 2015 and EUR 6m in 2016, Omerzel told a session of the parliament's Infrastructure Committee.

Using these same assumptions, the Šoštanj plant would operate at a loss in the first three years, which Omerzel said would be "nothing unusual for such investments", and post a profit thereafter.

The state-owned HSE, the parent company of both Termoelektrarna Šoštanj and the Premogovnik Velenje coal mine, is projected to end both 2014 and 2015 in the black, though with significant financial liabilities.

Omerzel suggested HSE should sell off assets, in particular its majority stake in HESS, the company which builds and operates hydro plants on the lower Sava, and in Gen Energija, the manager of Slovenia's half of the Krško Nuclear Power Plant.

It should also tap into EUR 70m of accumulated reserves at DEM, a profitable subsidiary which operates hydro plants on the Drava, and streamline operations, according to the minister.

The project at Šoštanj, dubbed TEŠ6, had originally been projected to cost EUR 600m but its price tag has since risen to over EUR 1.4bn, well above the level specified in a loan guarantee agreement extended by the state.

But HSE chairman Blaž Košorok told MPs that the EUR 1.4bn price tag had been known for a long time, the public was just being misled.

As for the HSE, Košorok said the company was looking for ways to improve cash flow, but it would be difficult to agree to sell either HESS or Gen Energija, or to tap into assets held by the operator of the hydro plants on the Drava.

The debate at committee was a prequel to the extraordinary session of parliament scheduled for Friday that is dedicated to what is the biggest investment in Slovenia at the moment.