The construction of the Mrsovo hydropower plant in Bosnia and Herzegovina has encountered significant setbacks following the termination of the contractor agreement by the state-owned utility, ERS. The decision to end the contract with Turkish firm NGA comes after ongoing disputes over technical and contractual issues rendered the continuation of the project under current terms impractical.
ERS Director Luka Petrović indicated that the project, which has already been plagued by delays and substantial financial investments, is now facing yet another restart. To date, approximately 20 million euros have been advanced to the contractor, alongside 35 million euros allocated for acquiring the concession from Comsar Energy. These financial commitments underscore the project’s complex financial landscape.
The core of the disagreement revolves around necessary redesigns of critical infrastructure components. Initially, the hydropower plant’s design was based on a flood standard calculated for a 500-year water level; however, regulatory authorities later mandated a more stringent standard based on a 1,000-year flood scenario. This regulatory shift necessitated revisions to vital structures such as the dam and river diversion system, which in turn increased costs and altered technical specifications. The contractor’s refusal to absorb these additional requirements ultimately led to a breakdown in collaboration.
Preparatory works had commenced on-site, including studies and planning for a diversion tunnel intended to redirect the Lim River during construction. However, progress has stalled due to the absence of updated documentation that aligns with regulatory standards required for permitting. The inability to secure a construction permit has effectively halted further development of the project.
In light of these challenges, ERS determined that modifying the existing contract would introduce financial uncertainty and additional risks of further delays. Consequently, legal proceedings against NGA have been initiated while ERS maintains that the project itself remains active and ongoing.
Despite these repeated setbacks, local authorities express optimism regarding the eventual completion of the hydropower plant. However, its development history illustrates persistent challenges; originally launched in 2014 with high expectations and relaunched in 2023 after state control was assumed over the concession, it remains stalled at early stages. This situation exemplifies broader issues related to delayed infrastructure projects tied to previous agreements with Comsar Energy.
The final cost implications stemming from the required design changes are still unclear, as updated technical proposals have yet to be submitted. New bidding procedures are anticipated later this year, which may provide greater clarity on both the financial scope and timeline for completing the 36.8 MW Mrsovo hydropower facility.
