ECONOMY

Siemens agrees to cancellation of 11-mln-euro contract with Bulgaria

SOFIA (AP) – German industrial conglomerate Siemens AG has agreed to cancel an 11-million-euro ($13.5 million) equipment supply contract with the Bulgarian government to make it easier to privatize a state-owned power plant, the privatization agency said yesterday. The deal between Siemens AG and the state-owned utility in the Black Sea port of Varna was impeding the planned sale of the utility to Russia’s electricity monopoly, Unified Energy Systems. The deadline for striking a deal with RAO UES is today. The government panel handling privatization said the agreement with Siemens AG was canceled under conditions that guaranteed the «country’s interests were protected as much as possible.» It did not, however, disclose details of any compensation offered. Siemens’ officials in Bulgaria were not immediately available for comment. Earlier this month the privatization agency delayed the planned sale of the Varna power plant to RAO UES, citing the emergence of «new circumstances.» Later, Economy and Energy Minister Rumen Ovcharov said the Russian investor was unhappy with the equipment delivery deal between the Varna utility and Siemens. In May, RAO UES won tenders to buy two major Bulgarian thermal power plants – in the Black Sea port of Varna and in the Danube port of Ruse. The Russian company offered 578.8 million euros ($689.6 million) for the plant in Varna, and 178.18 million euros ($212.3 million) for the Ruse plant. However, Bulgaria’s antitrust panel ruled that RAO UES could not buy both utilities. The privatization agency challenged the ruling in court, and postponed the deal on the Ruse plant pending the court’s decision.