The Protector of Property and Legal Interests gave her consent to the revised version of the Draft Contract for Leasing the Plant of the Nikšić Željezara, which Elektroprivreda agreed with the bidder from Switzerland, the company "8B Capital SA", and according to which this company can lease the plants of the Steel Plant and the Forge, but cannot acquire the right property in the factory in Nikšić.
Protector Bojana Cirovic she officially confirmed to "Vijesta" yesterday that she gave her opinion on the new version of the Draft Lease Agreement.
Originally, the Draft Agreement provided for the right for the Swiss company to acquire ownership rights and this did not pass the EPCG Shareholders' Meeting last week.
The consent of the Protectorate means that EPCG, if the Government gives its consent, can sign a new draft contract with the Swiss company, which provides for a 50-year lease.
"After the first version of the Lease Agreement was rejected, a second version of the Draft Long-Term Lease Agreement was negotiated with the potential tenant, which does not contain any of the provisions that caused the original version to be rejected. The second version of the Draft Lease Agreement is under consideration, from the aspect of compliance with positive legal regulations, and it is expected to be known soon whether it is acceptable in order to enter into final negotiations with a potential tenant", was officially told yesterday to "Vijesti" from the state energy companies.
From the Ministry of Energy and Mining, headed by the Minister Saša Mujović, they told "Vijesti" that the department has stopped the previous practice of making hasty, first of all, harmful contracts that are in conflict with the laws of the state of Montenegro.
"Minister Mujović has said on several occasions that the department he heads will not do anything until the contract and all the details are seen and the relevant state bodies and institutions give their opinion. Namely, from the very beginning, the Ministry of Energy and Mining supports EPCG management to find a credible partner for Željezara. After two unsuccessful international public calls, direct negotiations began, which resulted in two draft contracts. The Protector of Property and Legal Interests gave a negative opinion on both draft contracts. What is encouraging is that on June 26, an updated draft of the contract was submitted to the Ministry, in which the irregularities should have been corrected, and which was again forwarded to the Protector of Property and Legal Interests for his opinion. The new draft contract differs in one detail, which is that the lease does not go to property rights, but that the lease is granted for 6 years", the Ministry of Energy said.
Details from the agreed contract
According to the details of the agreed draft of the contract on the lease of production capacity in the Željezara, it is signed for a period of 50 years in order to preserve the restart of the production of forged steel (Steel Plant and Forge) and the development of production in other production facilities within the factory.
"All administrative, production and auxiliary facilities, production facilities, machines and equipment in production facilities in the factory area and internal factory infrastructure that provides functionality to technological processes are leased. The lessee undertakes to provide a bank guarantee at the beginning of each business month or an advance payment that covers the costs for that month arising from the monthly rent of EUR 31.000,00 paid during the entire lease period, the gross salary of employees for 150 of employees taken over from the existing employees of the Ironworks and the costs of consumed electricity", the draft contract states.
It is further defined that the lessee shall take over every month, after signing the Lease Agreement, 25 employees from the existing employees of Željezara, and that after the sixth month, he shall take over 150 employees in accordance with the contractual obligation, and that during the duration of the lease he cannot reduce the number of employees below 150 and that the selection of employees from the existing employees is performed by the tenant in accordance with its selection procedures. It was also specified that the price of electricity will be defined by a special contract in accordance with the law, with the fact that it cannot be lower than the price valid for consumers of the tenant profile. In addition, the Lessee must start production in the Steel and Forge no later than within a period of 12 months from the moment of signing the Lease Agreement.
"If the Tenant during the lease period decides unilaterally to terminate the Lease Agreement, he does not have the right to demand the return of investments in fixed assets or investments in working capital realized until then. EPCG (the lessor) cannot terminate the Lease Agreement during the agreed period of the lease and if the Lessee fulfills the agreed obligations. If EPCG unilaterally terminates the Lease Agreement before the end of the agreed lease period, it is obliged to compensate the lessee in accordance with the law. EPCG reserves the right to build solar power plants and potentially wind power plants at all locations in the factory area where there are solar and wind potentials and during the entire lease term. EPCG retains ownership of the entire property and does not transfer any part of the property to the lessee."
The draft contract also defines that the lessor will provide the right to use the old administrative building in the factory area and during the entire period of the lease, because it is necessary for the accommodation of DOIE employees and as the headquarters of EPCG - Solar Construction.
"The Lessor and the Lessee will decide by agreement that the Lessor can also use certain halls in the factory area in the function of warehouse spaces for the needs of the Lessor or its subsidiary companies, until the Lessee uses those halls to activate new production programs," says the draft contract.
At the end of 2022, EPCG bought the property of the Ironworks from the Turkish owner, the company Tosčelik, for 20 million euros. The start of production at the Steel and Forge plants under EPCG was not possible due to strict state aid rules.
If the Tenant during the lease period decides unilaterally to terminate the Lease Agreement, he has no right to demand the return of investments in fixed assets or investments in working capital realized until then, it is written in the Draft Agreement
All offers worth considering
Minister Mujović previously stated that the Swedish company Eneq is interested in Željezara (to buy Željezara) and that "Duferco" from Luxembourg offers the Government a strategic partnership.
"Vijesti" asked if the Ministry of Energy has made a decision regarding these offers and if not, when it will be.
"All these are offers worth considering, but also careful consideration and evaluation. Both companies have their own visions for the further development of Željezara's business. We remind you that the company Duferco offered a strategic partnership with the state that would cost between 120 and 130 million, without firm guarantees that the investment would result in a positive outcome, and the company Enek asked for concessions on certain energy sources, which is not acceptable to the state at this moment. The goal is certainly to consider and negotiate models that have a realistic chance of success. In any case, the public will be informed in a timely manner about all the proposals of the Ministry of Energy and Mining and the decisions made by the Government of Montenegro", said the Ministry of Energy.
From this department, they emphasized that all these activities that they carried out, which are initiated by Minister Mujović, aim to find the best solution for Željezara. "It is ungrateful to bid on deadlines, the common priority is to find a model that is realistic and sustainable in the long term for the company and its employees," said the Ministry of Energy.
Bonus video:
