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Qatar withdrew its investment in Greece due to inconsistency with the Lebanese CCC

22 October 2010 / 10:10:33  GRReporter
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The plan to build a new power plant of two power units with a capacity of 1010 MW in the region of Astakos in Greece nipped in the bud this week. This broke down the hopes of the Greek government that the project would be a good example for foreign investors and that it would attract new direct investments in the country. The project was announced earlier this year and was to bring an investment of around € 3.5 billion to the faint with fresh cash Greece. The government of George Papandreou welcomed the project still in its start and even gave it as an example of how attractive the investment in the Mediterranean country could be even in times of crisis.

The construction of the plant was purely a private initiative of three companies. Qatar Petroleum International (QPI), which is the state investment company of Qatar Petroleum, held 33% of the project. The other 33% were held by S & K Holding SAL, which in turn is a subsidiary of the Palestine-Lebanese construction company Consolidated Construction Company (CCC) based in Greece, and the rest of the enterprise was assigned to the German Rosebud Energie. The new plant was designed to use propane (LPG) and to produce electricity 70% of which would be exported to Italy and the other 30% would be for domestic consumption. Qatar Petroleum, which is the second largest producer of LPG fuel after Aramco in Saudi Arabia, was intended to supply the fuel.

According to the representative of the German company Rosebud Energie in Greece Georgios Andoniadis, the bone of contention was the selling price of the LPG. He said in an open letter that Qatar Petroleum offered between 35% and 40% discount of the market price of the fuel. The Lebanese Consolidated Construction Company, however, has requested 65% to 70%. The company from Qatar planned the higher prices to repay the investment in the project for 12 or 13 years with returns around 12% while the Lebanese company planned the same investment for not more than seven years. The lack of consistency between the companies led representatives from Qatar to withdraw from the project. So, the plant in Astaskos turned into a dream that would never come true. They defined the project as unattractive investment and decided to withdraw.

"The biggest investment for us are our good relations with Qatar," explicitly stated George Andoniadis and did not hide his internal belief that the representatives of the CCC are responsible for the failure of the transaction. In his words, quoted by the Greek edition Capital, the Lebanese have sought quick profits and jeopardized the relations with Qatar. The representative of the Rosebud Energie for Greece, however, said that not all is lost and a new partner for the initiative will be sought. The good news is that the withdrawal of Qatar Petroleum International from the Astakos project will not affect the memorandum signed already on government level for investing five billion euros in the area of the old Athens airport.

Consolidated Construction Company is one of the largest construction companies in the Middle East. It has opened 65,000 jobs and develops projects in over 50 countries worldwide. The company was founded in 1952 and became a strategic partner of the U.S. construction giant Bechtel a decade later. After the start of the civil war in Lebanon, the owners of the company, who are of Palestinian origin, transferred the main office first in London and later in Athens.

 

Tags: EconomyMarketsAstakosPower plantLPG
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