| WARSAW, April 3
WARSAW, April 3 The investment committee of
Poland's biggest utility PGE has advised the group's
management board to pull out of a project to build a $3.56
billion coal-fired power plant at Opole, two sources close to
the company told Reuters.
The board was scheduled to discuss the recommendation on
Wednesday, the sources said, but the outcome of that discussion
was not yet known. A company spokeswoman did not respond to an
emailed request for comment, and did not answer phone calls.
The plan to build two 900-megawatt coal-fired units at
Opole, near Poland's border with the Czech Republic was
considered a strategic investment as Poland needs to replace its
outdated capacity with new power plants to avoid blackouts in
the coming years.
But falling electricity prices and weaker demand, linked to
Poland's slowing economy, have raised questions about
profitability of the new investment.
"The investment committee in the group recommended not to
build Opole. The management board was supposed to discuss this
on Wednesday," a person close to the company said.
"But it is unlikely that the management board will not
follow this recommendation," the person added.
A second source confirmed the investment committee had
advised pulling out of the project.
The investment in Opole had been keenly awaited by local
construction companies. Weak prices and tough competition for
road-building deals had pushed them to the brink of insolvency.
The consortium to build Opole includes Polimex,
Rafako, a unit of another troubled builder PBG
, and Mostostal Warszawa, a unit of Spain's
($1 = 3.2628 Polish zlotys)
(Editing by Christian Lowe and James Jukwey)