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State body: Turkish firm breached power contract

The Turkish power barge Fatmagul sits idle as a dispute simmers over the terms of a contract to supply electricity to Lebanon.

BEIRUT: The Central Inspection Committee blamed Wednesday the Turkish operator of an electricity-producing barge for failing to meet its contract terms with Lebanon and recommended the Lebanese state seek compensation. Karpowership, the operator of the Fatmagül powership, stopped its electricity production in April, citing poor quality fuel oil delivered by Electricite du Liban. It resumed supplying EDL with electricity early June after conducting repairs as the new fuel shipments arrived.

An EDL source told The Daily Star that the Lebanese judiciary was also investigating the delay in the arrival of a second electricity-producing barge that should have docked in Lebanon in June as agreed between the Energy Ministry and the Turkish company.

The second Turkish power barge, Orhan Bey, is expected to arrive by August and has been delayed due to technical issues, according to a company source. Energy Minister Gibran Bassil has said the government was entitled to $82,000 a day in delay fees.

The decision issued by the Central Inspection Committee said the Energy Ministry and EDL should resort if necessary to arbitration as stipulated by the contract to compel the Turkish operator to pay compensation for breaching the agreement terms.

EDL had long insisted the fuel it supplied to the ship matched the contract while the firm said fuel specifications should match IS0 8217 standards.

The Central Inspection Committee report said Appendix B of the contract stipulates fuel specifications lower than what was demanded by the company.

A report released earlier this month by the Court of Accounts said while ISO standards required fuel to contain less than 0.1 percent of sediments, the contract allowed for up to 0.2 percent. ISO also requires fuel to be free of additives including metals and lube oil, which is not the case in Appendix B.

The Court of Accounts report also pointed out that the Turkish company did not equip its engines with the appropriate filters needed to avert damage from fuel quality.

 
A version of this article appeared in the print edition of The Daily Star on July 25, 2013, on page 5.

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