The 5-unit Sostanj power plant in Slovenia had been burning lignite since 1956. The construction of a new, 6th unit, 600 MW capacity, was 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 million E, its price doubled to a staggering 1,4 bln E. All the indications were that the one responsible for such an enormous increase in costs was the power plant’s main contractor – Alstom. Alstom is believed to have secured financial gains by changing contracts and increasing the cost of the project. In 2014 ten people were charged with fraud in relation to the Sostanj 6 power plant project, having caused a suspected 284 mln E in financial harm to electricity consumers. Although the Slovene police declined to provide any names, unofficial information obtained by the Slovene Press Agency (Slovenska tiskovna agencija) indicated that the company suspected of the fraud is Alstom, the main contractor for the Sostanj 6.
Sostanj 6 is not the first scandal with Alstom playing the leading role. The company and/or its staff have 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.
The latest project Alstom has become famous for is a German power plant in Hamm. It used to be worth 2,5 bln Euro, yet its constant malfunctions made the power plant no operational and caused major financial loses. In the end a decision was made to sell this project. The investors were presented with a surprising offer reflecting the true value of this installation: one Euro for each of them. The malfunctioning unit will probably not be made operational at all.
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?