Will New Belgrade finally be heated with hot water from TENT? – Selection of FIDIC engineers stalls thermal pipeline project

The Belgrade Power Plants have announced the implementation of a negotiation procedure for the procurement of FIDIC engineers’ services for the construction of the thermal pipeline Obrenovac-New Belgrade, after the consortium that previously won the job withdrew.

It is not specified with whom the negotiations will be held. The explanation for the award of the contract without a public call for tenders states that the contract for the construction of the thermal pipeline Obrenovac-New Belgrade was signed in January 2020 between the Belgrade Power Plants and the City of Belgrade and the contractor Power Construction Corporation of China. The contract was then annexed with amendments that include an extension of the project implementation in October 2023, and then with a second annex in November last year. For the project for the construction of the thermal pipeline from the Nikola Tesla Thermal Power Plant to New Belgrade, Serbia provided funds through a loan from the Export-Import Bank of China.

Furthermore, the Belgrade Power Plants’ notification explains that the construction of the thermal pipeline under the contract requires the mandatory engagement of FIDIC engineers, and that this is where the problem arose that slowed the project.

Namely, as stated, a tender was conducted for the engagement of FIDIC engineers, on the basis of which a contract was signed in 2021, with an accompanying annex from 2024, with a group of bidders consisting of Delta inzenjering doo Beograd (as the contractor), SESS Beograd, AB&CO d.o.o. Novi Sad and Delta Preving d.o.o. The annex ceased to be valid in November last year, and the contractor refused to sign a new annex to extend the implementation deadline, which the Belgrade Power Plants, as stated, did not expect after signing the first annex.

– The Belgrade Power Plants could not have foreseen this, because the FIDIC engineer signed the previous Annex for the extension of the implementation deadline and was aware at least 6 months before signing Annex 2 that a new extension would occur, so BPP could not take timely steps to replace the FIDIC engineer – this public utility company explains.

They point out that the lack of a hired FIDIC engineer on the project has put the Belgrade Power Plants Public Utility Company and the project itself in an unenviable and difficult position.

– Considering the scope of services that the FIDIC engineer provides on the project and that the works cannot be carried out without hiring an engineer, the implementation of the procurement for the merits of which we are seeking an opinion would allow the damage caused to be limited and reduced by a considerable amount – the Belgrade Power Plants announcement states.

It is added that the implementation of the negotiation procedure without publishing a public call would allow the continuation of the project implementation, the execution of works, the withdrawal of loan funds and other contractual activities.

Let us remind that, when signing the first annex to the construction contract with a Chinese contractor in 2023, Belgrade Mayor Aleksandar Sapic stated that “in two years, Belgrade will finally get what it has been awaiting for more than 30 years.”

– We will not depend on others, but will have our own thermal energy, we will be directly connected to the power plant in Obrenovac. Only in this way will we be able to heat more than half of New Belgrade – Sapic stated at the time.

B. P.

JKP Beogradske Elektrane Beograd

Grad Beograd

Delta inženjering d.o.o. Beograd

SESS doo Novi Beograd

Delta preving d.o.o. Beograd

AB & Co Geosystems d.o.o. Novi Sad

PUC Belgrade Power Plants

City of Belgrade

TENT Obrenovac

Power Construction Corporation of China

Delta inženjering doo Beograd

SESS Beograd

AB CO doo Novi Sad

Delta Preving doo

thermal pipeline Obrenovac New Belgrade

FIDIC engineer

negotiation procedure