Tauron Cleared to Sign $1.7 Billion Power Plant Contract

Tauron Polska Energia SA, Poland’s second-biggest utility, was cleared to sign a 5.41 billion-zloty ($1.7 billion) contract with a group led by Rafako SA to build a coal-fired power plant.

The Warsaw-based National Appeals Chamber today rejected protests from groups led by China National Electric Engineering Co. Ltd. and SNC-Lavalin Group Inc., which were excluded from the bidding process for the Jaworzno plant in January. The state-controlled utility said this month it waits for the ruling to sign a contract with Rafako and Acciona SA’s unit Mostostal Warszawa SA.

Tauron, whose largest investment project has been delayed for two years, is building new plants to replace its aging production facilities. Enea SA, its smaller competitor, agreed to build a 1,000-megawatt plant in Kozienice for 6.28 billion zloty in September while Electricite de France SA and Energa SA suspended Polish projects as electricity prices dropped to a record and output from hard coal-fired units is crowded out by cheaper lignite and renewable production.

CNEEC, as the Chinese company is known, bid 4.9 billion zloty to build a 910-megawatt coal-fired unit, while the Lavalin’s group, which also included Hitachi Power Europe GmbH, offered 5.91 billion zloty.