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Zeman: Kyrgyz withdrawal from contract with Czech firm standard

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Prague, Sept 20 (CTK) – The Kyrgyz government’s decision to withdraw from its contract with the Czech Liglass Trading firm is a standard procedure, President Milos Zeman told reporters on Wednesday.

Under the contract, the firm was to build a cascade of hydroelectric power plants on the Naryn River in Kyrgyzstan.

The Czech and Kyrgyz press reported that Zeman’s office head Vratislav Mynar pleaded for the firm.

However, Kyrgyz Prime Minister Sapar Isakov announced at the government meeting on Monday that Kyrgyzstan would unilaterally withdraw from the contract with Liglass Trading, the Kyrgyz media reported.

Zeman alone pleaded for Liglass Trading. He recommended the firm to his Kyrgyz counterpart Almazbek Atambayev during their meeting.

“I think that the Presidential Office head did the same that I did during my conversation with the Kyrgyz president in the case of this firm,” Zeman told reporters.

He added that he had been lobbying for dozens of Czech firms during his term in office on the basis of the Industry and Trade Ministry’s recommendation.

Zeman also said the announced withdrawal from the contract with Liglass Trading is a standard procedure. “If this deal failed, I consider this a standard matter,” Zeman said.

Liglass Trading, seated near Zelezny Brod, north Bohemia, signed an agreement on the construction and operation of two large and ten small hydroelectric plants in Kyrgyzstan in July. The firm took over the project from the Russian RusGidro with which Kyrgyzstan terminated the contract last year, allegedly due to its insolvency.

The Czech firm pledged in the contract to spend about $37 million on the purchase of RusGidro’s stock in the ZAO Verkhne-Narynskiye GES company that was in charge of the project. The sum equals the value of the works that the Russian firm carried out on the cascade so far.

Doubts emerged at the beginning about Liglass Trading being able to fund such an extensive project. server wrote in July that the firm had reported revenues of 345,000 crowns and a loss of one million in 2014.

The RusGidro management said last week it would claim the unpaid sum of $37 million from the Kyrgyz government in an international arbitration.

The press has reported that Liglass Trading is not known in this field in the Czech Republic. Despite that, Mynar lobbied for the firm with his counterpart in Atambayev’s office.

Liglass Trading general director Michael Smelik said the firm was prepared to turn to an international arbitration if Kyrgyzstan really withdrew from the contract without meeting the contractual rules of dispute settlement.

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