The construction of the Mrsovo hydropower plant in Bosnia and Herzegovina has encountered significant setbacks, prompting state-owned utility ERS to terminate its agreement with Turkish contractor NGA. This decision comes as the project faces ongoing redesign disputes and delays that have hindered its progress since its inception.
ERS Director Luka Petrović indicated that unresolved technical and contractual issues rendered it impractical to continue under the current agreement. The project has already seen substantial financial commitments, including a 20 million euro advance payment to NGA and an additional 35 million euros allocated for acquiring the concession from Comsar Energy.
The core of the dispute revolves around required modifications to critical infrastructure components. Initially designed based on a 500-year flood level standard, regulators later mandated adherence to a more stringent 1,000-year flood scenario. This regulatory shift necessitated extensive design revisions affecting essential structures like the dam and river diversion system, which in turn escalated costs and altered technical specifications. The contractor’s refusal to accept these additional requirements led to a breakdown in negotiations.
Preparatory work had commenced on-site, including studies for a diversion tunnel intended to redirect the Lim River during construction. However, progress has stalled due to the lack of updated documentation that meets regulatory standards, preventing advancement to the permitting phase necessary for construction. Consequently, without securing a construction permit, further development was halted.
<pIn light of these challenges, ERS determined that amending the existing contract would introduce further financial uncertainty and potential delays. Therefore, the utility opted to terminate its relationship with NGA and initiate legal proceedings against the contractor while affirming that the hydropower project remains active.
Despite these ongoing obstacles, officials are optimistic about completing the hydropower plant. The project, initially launched in 2014 and relaunched in 2023 after state control of the concession was established, has yet to move beyond early development stages. This situation exemplifies broader issues related to delayed infrastructure projects linked to prior agreements with Comsar Energy.
The financial implications associated with the required design changes remain unclear as new technical proposals have not yet been submitted. Upcoming bidding procedures later this year are expected to clarify both the financial scope and timeline for completing the 36.8 MW Mrsovo hydropower facility.
