20 september 2018

Central Asia news

Government of Kyrgyzstan terminates contract with Czech Liglass Trading on construction of hydropower plants

19.09.2017 12:29 msk


Duishenbek Zilaliyev, Almazbek Atambayev and head of Liglass Trading Michael Smelik signing the agreement
The Kyrgyz government terminated the contract with the Czech company Liglass Trading, according to which the latter was to construct large and small hydroelectric power stations over Naryn river, Deputy Prime Minister Duishenbek Zilaliyev said today. He said a lack of legal opportunities to extend the agreement became the reason of the decision to sever the contract unilaterally, Kaktus Media reports.

"I support this decision; we must comply with all the rules so that we do not lose the lawsuit so that there are no complaints. I ask the relevant departments to consider all documents of the tender," Prime Minister Sapar Isakov stated during the government meeting discussing further cooperation with the Czech company.

Zilaliyev reminded that Kyrgyzstan owns $ 1 million 147 thousand Liglass Trading had paid as a guarantee contribution, which will remain in the republic. Sapar Isakov also assured during the meeting that the republic had not incurred losses from the failed agreement.

"I would like to forward all documents and letters within the framework of this project. I believe that we have lost some time and we must make up for lost time and manage procedures for a new tender. I will control this question personally, you can not stop, you need to go further," said Isakov.

On 10 July it became known that the company Liglass Trading undertook to build a number of hydropower stations in Kyrgyzstan, is ready to pay Russian RusHydro $ 37 million shortly and attract up to $ 500 million in investment. Journalists of the Czech Republic found out that this company is unprofitable, it traded glassware and urns for crematoria in the past with no significant projects, including infrastructure or related to hydropower.

The Kyrgyz embassy in Austria and the Czech Republic, as well as the Kyrgyz Foreign Ministry, warned its government against the contract with Liglass. Nevertheless, the government signed the deal.

The head of the State Committee for Industry and Energy Duishenbek Zilaliyev assured the journalists that if Liglass does not contribute the promised $ 37 million, "then in 30 banking days we unilaterally break the agreement and announce the second tender. There will be no damage, and there is no reason for concern."

Until 19 September, Liglass Trading was to contribute $ 37 million to repay the debt to Russian RusHydro, which previously invested this amount in the construction of the hydropower plant on Naryn river. However, Deputy Prime Minister Duishenbek Zilaliyev said today that the company - again for the fourth time - turned to the government with a request to postpone the payment.

Earlier, the then head of the President's Office Isakov spoke of 15 September as the deadline for the expiry of the payment term. Then Isakov already as a prime minister called a new date - 18 September. Later, the State Committee for Industry, Energy and Mineral Mining announced a date of 19 September.

Today, the directors of Liglass Trading Michael Smelik and Jiri Vojtechovsky admitted that the scandal froze about 40 company accounts in a number of European banks. But this will not affect the financing of projects in Kyrgyzstan, they assured. In all likelihood, the government of the republic, which has been persuading itself and the public of Kyrgyzstan for a long time in the reliability of Liglass Trading, has finally realised that it is most likely been fooled.

Fergana News Agency