Next year, they will connect the cable to the domestic portable system.

Interview with CEO Ivan Bulatović for Pobjeda:

CGES satisfied with the pace of construction of the subsea energy link project to Italy

Next year, they will connect the cable to the domestic portable system.

The schedule for the works to connect the energy submarine cable to Montenegro's transmission network, for which the Montenegrin Transmission System Operator is responsible, is in line with the schedule for the works on the part of the project being implemented by the Italian company Terna, stated the CEO of CGES, Ivan Bulatović.He recalled that the construction of the Lastva Čevo-Pljevlja transmission line, the Lastva substation and the cable is part of the Trans-Balkan Corridor, which will connect Montenegro, Serbia and Romania, in order to link the Balkan markets with Western Europe.

On the EU list

The undersea energy cable between Montenegro and Italy has been included on the official lists of projects of importance to the European Union and the Energy Community. Individual phases of this major project will be completed during this and the coming year, when the connection to Montenegro's existing transmission system is also expected, Bulatović told Pobjeda.The contract for the cable connection between Italy and Montenegro was signed in mid-November 2010, and the total value of the project is one billion euros.

The construction of the cable positions Montenegro as an important energy hub. It is important that the construction of these capital projects will provide the prerequisites for the further development of Montenegro's transmission system, stated Bulatović, and reminded that the construction of the 'Lastva-Pljevlja was initiated in 2011, with the signing of a strategic, shareholding and project coordination agreement between the state of Montenegro, Terna and CGES.

The total value of this investment, which includes the construction of the Lastva 400 kV substation, the Lastva Čevo-Pljevlja transmission line and the connection of the existing 400 kV Podgorica-Trebinje transmission line to the Lastva substation, amounts to 106 million euros, or 127 million euros if we also include the construction of the transmission line from Pljevlja to the border with Serbia, as well as investments in the internal network, for which a donation from the EU has been secured," said Bulatović.

He specified that the pylon line from Latsva to Pljevalaj is 194 kilometres long and has 670 pylons.

According to him, work on the Lastva substation, valued at 30 million euros, is progressing at a satisfactory pace.

CGES has completed 90 per cent of the activities and the completion of the substation is expected during this year. Work on the transmission line (design, equipment procurement and construction) is progressing at a slightly slower pace, stated Bulatović. The construction of the transmission line and the substation is part of the connecting infrastructure that will link the electricity systems of Montenegro and Italy.

Electrical substations

The construction of the 400 kV substation will create the long-term prerequisites for the dynamic development of new tourist complexes, new sources, and their connection to the transmission network. The transmission network in the Primorje region will become stronger and more reliable by introducing another point, in addition to Podgorica, from which the Primorje region will be supplied – Bulatović emphasised, explaining that 98 per cent of the land acquisition process for the pylon sites has been completed, and that securing access to the pylons is also nearing completion.

The process of compulsory purchase is very complex. CGES, as the responsible business entity, is trying to find solutions that are optimal for all parties. We are aware that this is not always straightforward, but we will use every opportunity within the regulations to realise the investment with as few dissatisfied parties as possible," said Bulatović. He pointed out that the EU has recognised the efforts of Montenegro and CGES to participate in and implement important projects to strengthen the electricity infrastructure, and has therefore awarded the company a grant of 25 million euros, which will ease the transmission tariff during the current regulatory period. CGES's key investments from 2017 to 2019 are the construction of the 400 kV Pljevlja2-Bajina Bašta and Pljevlja2-Višegrad transmission lines to the border with Serbia, the Brezna substation – Phase I and connection to the 110 kV Nikšić-Brezna transmission line, replacement of high-voltage equipment in substations, and the reconstruction of protection and control systems across the entire network.

This year, the planned implementation of the aforementioned investments is 7.5 million euros. The value of total investments in the first six months of the current year amounts to ten million euros, Bulatović specified, adding that they have secured favourable credit arrangements with the European Bank for Reconstruction and Development and the German Development Bank.

-A significant portion of our investments is financed through the company's regular operations and, with the shareholders' understanding, a portion of the accumulated profit is used to ensure priority investment projects are completed within the planned timeframe," said Bulatović, stressing that all planned and unscheduled maintenance has been carried out. as well as inspection tours to ensure the system is stable during the tourist season. He also recalled that the formal prerequisites for the establishment of the Montenegrin electricity exchange have been met, after which formal registration is expected.

The exchange is expected to influence the formation of the benchmark price for electricity in Montenegro. In the long term, once the cable is put into commercial operation, the exchange is expected to be fully operational. The merger of regional exchanges is also expected in the near future, said Bulatović.

They are claiming 12.2 million from EPCG

According to Bulatović, CGES is owed 12.25 million euros by Elektroprivreda as principal debt.

-Of the 11 disputes based on CGES's lawsuits against EPCG before the Commercial Court for the collection of fees for the engagement of transmission capacity from the beginning of 2014 to 31 July 2015. of the 11 disputes that CGES has brought against EPCG before the Commercial Court for the payment of fees for the use of transmission capacity from the beginning of 2014 to 31 July 2015, first-instance judgments have been rendered in our favour in six cases," said Bulatović, adding that he expects the Court of Appeal to dismiss EPCG's appeals.

Satisfied with the business results achieved

CGES finished last year with a net profit of 2.4 million euros, 1.6 times lower than in 2015.

The result is more than satisfactory given the conditions in which it was achieved, and it is better than planned. Due to the major investment cycle the company is undergoing, as well as the demanding regulatory framework, such a result leaves room for satisfaction and optimism, claims Bulatović.

S. POPOVIĆ