The huge government tender for constructing a solar power plant at Ashelim in the Negev is in danger of failing, with one of the last three remaining bidders about to withdraw.
Sources inform "Globes" that the Veolia and BrightSource Industries consortium recently decided to drop out, but the consortium has not yet officially informed the tenders committee of its decision. It is thought that the withdrawal of the Veolia-BrightSource consortium will be liable to put the continuation of the tender at risk, since in a tender with only two bidders competing to construct two power plants it will be extremely difficult to prevent price fixing between the bidders and to hold a genuine tender process.
Veolia did not explain the reasons behind its decision, but said it has nothing to do with the resignation of Ofra Gorni, VP for business development in the group.
The consortium of IDB Holding Corp. Ltd. (TASE:IDBH) unit Clal Energy Ltd. and Spain's Abengoa Bioenergy SA (IBEX:ABG) also announced its withdrawal from the tender because of internal differences of opinion. The Ministry of Finance hopes that Abengoa will carry on alone, in which case three consortia will remain.
Three bidders are still formally in the race: Abengoa, the Siemens and Shikun u'Binui consortium, and a consortium comprising Solar Millennium, Minrav Holdings, and Electra. The Ministry of Finance meanwhile continues its efforts to support the tender, which is worth $1 billion.
The solar power plant planned for Ashelim is meant to be one of the world's biggest of its type, and to provide about 2% of Israel's total electricity consumption.
Published by Globes [online], Israel business news - www.globes-online.com - on May 20, 2010
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