CEZ together with Dalkia and Ener-G submitted their bids yesterday for a 80 MW heating power plant in Varna. CEZ’s offer was the third highest totalling EUR4.56m below Dalkia’s EUR6.78m and Ener-g’s EUR6.23m. The announcement of the winning bid should be made in a week.
Our view: CEZ’s offer is c33% below the highest and c27% below second highest offer and this may suggest that its chances of winning the tender are relatively low. We would however wait whether there are other conditions attached to the tender, which may offset the price difference. The offered prices show (i) increasing competition in the region and (ii) CEZ’s reluctance not to overpay. Note that Bulgaria is further privatizing the 40 MW power plant in Rouse, heating power plant in Rouse and Sliven.