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Dvur Kralove heating plant is not going to be sold yet

25. 4. 2003

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Dvur Kralove heating plant is not going to be sold yet

Even in the second round of a tender, the CEZ Power Company did not choose a new owner of Dvur Kralova heating plant. The tender was cancelled because all the offers were too low to be accepted.

CEZ management still intends to hive this atypical source off the CEZ portfolio. One alternative solution is to establish a joint enterprise with the Dvur Kralove municipality, similarly to the model which CEZ is trying to implement in the case of Hodonin power plant and which it would like to apply also in the case of Porici power plant. These projects are aimed at interconnecting these sources (supplying mainly heat) with essential networks owned by the municipality and, more importantly, at encouraging the municipality to support this effective method of heat production, thus ensuring the operation of existing sources and subsequently maintaining the existing job opportunities. Last year, CEZ Power Company carried out tenders aimed at selling heating plants in   Nachod a Dvur Kralove. The Nachod heating plant was successfully sold to Harpen CR, s.r.o. in March this year. The acquisition cost offered for Dvur Kralove heating plant was not sufficient, which is why CEZ management decided to cancel the tender and repeat it later on. However, the second tender did not generate any acceptable offer either.

CEZ had several reasons for selling the plants. The gradual opening of both domestic and European market with electricity makes it necessary for CEZ to transform itself from a company focused predominantly on production into a commercial-production company. This process is closely related with the fact that the company activities focus on its "core business? - i.e. electricity production and the provision of associated services - and on optimising its portfolio of sources, in order to be able to maintain its position on the strongly competitive Central European market.

Another reason is the need for continuous improvement of labour productivity, which also entails focusing on crucial power-producing sources, which do not include the heating plants in Nachod and Dvur Kralove. The electricity output of these two plants is generated mainly by enforced production resulting from heat supply and accounts for less than 0.1% of the total electricity volume supplied by CEZ. The sale of the plants is fully in accordance with the strategic plan of CEZ.

A total of 44 business entities were invited to take part in the second round of the tender for the Dvur KralovĂ© heating plant, which has generated a total of 6 bids.

Ladislav Kriz, CEZ Press Officer