HN: ČEZ, Czech Coal ready to sign coal supplies deal

Prague/Most, Feb 22 (CTK) - Power producer CEZ and mining company Czech Coal of entrepreneur Pavel Tykac will sign a contract on coal supplies in the days to come, ending one of the biggest disputes in the Czech energy sector, daily Hospodarske noviny (HN) said Friday, referring to several sources.

The Pocerady power plant, owned by CEZ, will receive six million tonnes of coal a year from Czech Coal's mine Vrsany until coal in the mine runs out, that is for approximately the next 30 to 50 years. The value of the coal exceeds Kc200bn, HN said.

The contract will also contain a non-aggression pact, according to the paper.

"I can confirm that we have switched from the position of rivals to the role of partners perhaps for the first time," a member of Czech Coal's management, familiar with the development of talks, said.

Both the companies will more or less give up any continuation of the current disputes that are being fought at many levels, HN said.

A large part of issues in the talks between CEZ and Czech Coal on coal supplies have already been agreed on, Czech Coal spokeswoman Gabriela Sarickova Benesova told CTK Friday.

CEZ spokesman Ladislav Kriz said there is an 80 percent chance that the agreement could be signed within two weeks.

Sarickova Benesova said the date of the possible signing of the contract with CEZ by Czech Coal is not clear yet because the documents are extensive.

"The talks continue, a large part of things has been agreed on. We think it develops in a positive direction, but the agreement has not been concluded yet," Sarickova Benesova said.

Documents on the contract weigh around 60 kilogrammes in paper form, and lawyers are going through them line by line, she said. Kriz also said the talks are going in a positive direction, but declined to comment on details until the agreement is signed.

The power plant's long-term contract expired at the end of 2012. For several months last year both the sides were trying to agree on prices for this year, but the dispute was one they failed to overcome.

It now ensues from the contract that the purchasing price of brown coal will grow to Kc39 per a gigajoule. In the future, the price will be tied to prices of black coal.

Companies nowadays insure themselves because of every trifle owing to disputes at Czech courts and the European antitrust office that drag for many years, HN said.

The option agreement on the possible sale of the second largest Czech thermal power plant Pocerady to Pavel Tykac, for example, is being drafted in great detail, according to the paper.

The agreement is advantageous for both sides, according to experts. If anybody could be described as a loser it is Energeticky a prumyslovy holding, a joint company of the PPF and J&T groups and manager Daniel Kretinsky.

Energeticky a prumyslovy holding has also been embroiled in a long-lasting dispute with Czech Coal over coal prices and supplies for its company Elektrarny Opatovice.