The 5-unit Sostanj power plant has been burning lignite since 1956. The construction of a new, 6th unit, 600 MW capacity, has been highly controversial not only because of environmental issues. From the very beginning it was a center of a financial scandal. Though it was supposed to cost 700 mln E, its price doubled to a staggering 1,4 bln E. All the indications are that the one responsible for such an enormous increase in costs is the power plant’s main contractor – the French company Alstom, involved also in numerous energy projects around the world. Alstom is believed to have secured financial gains by changing contracts and increasing the cost of the project.
This scandal also tarnishes reputation of two main public banks financing the project. The sole fact that these institutions had financed environmentally hazardous coal projects raised concerns of the civil society. Now the citizens demand that the European Bank for Reconstruction and Development and the European Investment Bank, which granted loans to the Sostanj 6 project, expand their internal investigations to include these new charges in Slovenia, to complete the investigations and make their findings known to the public.
Sostanj 6 is not the first scandal with Alstom playing a leading role. The company and/or its staff has been found guilty of corruption offences in relation to at least seven other cases. Alstom has been under observation by the Norwegian Finance Ministry since 2011 after its Council on Ethics recommended in 2010 to exclude Alstom from the Government Pension Fund Global. Most recently, the UK Serious Fraud Office charged Alstom Network UK with paying around USD 8.5 million in bribes between 2000 and 2006 to win transport contracts in India, Poland and Tunisia. Scandals and unethical business practices did not escape the notice of the civil society. In 2013 Alstom was nominated for the ‘prestigious’ Public Eye Awards, or the ‘award of shame’, for the worst company of the year.
Sostanj 6 is the perfect alarm call for everyone in southeast Europe to wake up and start looking more carefully at what's going on with coal projects in the region -said Barbara Kovac from Focus Slovenia. In Slovenia, our state is already struggling under the financial burdens of this failed project. This should not be allowed to happen in other countries too. It's time to stop swallowing unsubstantiated promises of jobs and economic development and time to start asking tough questions.
It is high time to ask the same question regarding Elektrownia Północ. Is Alstom – the company responsible for fraud and corruption – trustworthy even in the least? Especially the financial institutions which manage public funding, and plan to support the Elektrownia Północ project should pay close attention to the contractor’s activities. Today no one can guarantee that the cost of this investment will not increase dramatically. If so, who will pay the difference? The investor or, as it was in the Sostanj 6 case, the society?