State rescinds Gabčíkovo hydropower plant lease contract

The state has decided to rescind the contract with Slovenske Elektrarne for the lease of the Gabčíkovo hydropower plant. The contract regards the operation of the Gabčíkovo hydropower plant that Slovenske Elektrarne signed with the state-run company Vodohospodarska Vystavba back in 2006 as part of the sale of a 66-percent stake of Slovenske Elektrarne to the Italian company Enel. "After eight years of operating the Gabčíkovo hydropower plant by the Italian company Enel, we have decided, based on flagrant violations of this contract, to rescind the contract. This is our decision," Prime Minister Robert Fico told a news conference on Thursday. Fico argued that there are three reasons for rescinding the contract. "Slovenske Elektrarne, i.e. its majority owner, the Italian company Enel, refuses to provide us elementary data and information that would allow us to determine to what extent the distribution of profits from the hydropower plant is just or unjust for the state," Fico introduced the first reason. The second reason is, according to him, the fact that Slovenske Elektrarne, led by the Italian management failed to prepare any plans for the refurbishment and general overhaul of this hydropower station. The third reason is that the Italian Enel does not fulfil its duty to pay on an annual basis 5 million euros to Vodohospodarska Vystavba, which manages the Gabcikovo facility. This amount should be directed to the maintenance of the waterworks related to the operation of the Gabčíkovo hydropower plant. "The Italian Enel casts doubt on this. Demanding that the Slovak Republic pay back 43 million euros," said Fico. The Prime Minister although is not concerned about possible sanctions or international arbitration on the side of the Italian investor.