In 2014, Slovenian police arrested 10 people and charged them with fraud for their suspected roles in bilking customers out of €284 million through scams and bribery related to construction of the Sostanj 6 lignite power plant project. According to reports by the Slovene Press Agency, the principal architects of the scheme worked for the main supplier of the plant’s equipment, Alstom, which is alleged to have made millions by changing contracts and inflating the cost of the project.
When the coal-burning plant was first proposed publicly as the “Slovene energy future” in 2006, the total projected cost to build it was estimated at €690 million. By the time initial testing operations began in 2014, however, the price tag had more than doubled to €1.43 billion.
The scam was funneled through Slovenia’s public procurement process, which should have opened contracts to build the plant to competitive bidding. Loopholes in the process and the assistance of government insiders, however, made it possible for highly suspect deals to be made under the table. According to information from the Slovenian criminal police, the consultant group that selected Alstom for the project, Sol Intercontinental, was actually a subsidiary owned by Alstom. Through this sham arrangement and other questionable business decisions, investigators determined, Alstom profited to the tune of almost €285 million.
Because Slovenian state officials had signed repayment guarantees for 80 percent of the loans provided by the European Union development bank, Slovenian consumers and taxpayers pay will likely end up covering the costs of the overcharges accrued by Alstom.