Sources inform ''Globes'' that the bid submitted by the consortium of Siemens AG (NYSE: SI; XETRA: SIE) and Shikun u'Binui Holdings Ltd. (TASE: SKBN) in the tender for the Ashelim solar power plant is higher than the tariffs set for photovoltaic and thermosolar facilities in the arrangement with the Public Utilities Authority (Electricity).
This means that the government, which initiated and is promoting the $2 billion innovative venture, will have to provide subsidies during the 25-year franchise operating period, unless it can succeed in prompting a drastic reduction in the bid. In other words, the tender to obtain a minimum price failed in its main objective.
Sources involved in the tender said that because this is the first project of its kind in the world made it very hard for the franchisee to price the risk and offer competitive prices. The fact that the Siemens-Shikun u-Binui consortium is the sole bidder in the tender further complicates the government's position.
Tomorrow, the Brightsource Energy Inc.-Alstom SA (LSE: ALS; Euronext: ALO) consortium, is due to submit the only bid to build the thermosolar power station, which will be the same size of the Siemens-Shikun u-Binui power station and will be built adjacent to it (Plot B). The estimated investment in each power station is $800 million. The bidders invested over €1.5 million in preparing each tender.
The tender includes the construction of two 110-megawatt thermosolar power stations and operating them for 25 years at Plot A and Plot B, and for the construction of a 30-megawatt PV power station.
Published by Globes [online], Israel business news - www.globes-online.com - on March 21, 2011
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