Liglass Trading. Chronicle of scandal

The scandal around the Czech company Liglass Trading is gaining momentum. The journalists of 24.kg news agency reproduced the entire chronicle of doubtful investment story as of today.

How small hydropower plants were sold

The possibility of construction of small hydropower plants was for the first time discussed in the government after a meeting with Czech companies in November 2015. Then representatives of GEEN General Energy a.s came to Kyrgyzstan. They were ready to build four small hydropower plants.

Later, in 2016, Prime Minister Temir Sariev said that 16 small hydropower stations would be built in Kyrgyzstan for $ 190 million.

Soon it became clear who will build them: the Czechs. Two energy companies from the Czech Republic intend to invest in construction of small hydropower plants in Kyrgyzstan. This was stated by the Speaker of the Parliament Asylbek Jeenbekov, answering journalists' questions after the visit of the official delegation of the Czech Parliament to Kyrgyzstan. However, there was no talk about any Liglass Trading then.

In March 2016, it became known that the Cabinet was going to announce a tender for the construction of small hydropower stations. However, investors left earlier than all the disputed issues were resolved. Czech companies abandoned the project, and the Ministry of Economics explained it by the fact that there were others willing to invest in the project.

The business, however, had its own views on the reasons for the failure of the project. They believe that all the difficulties are incurred in the process of allocating land for future stations.

By October 2016, the State Committee for Industry, Energy and Subsoil Use reported that it had almost prepared a provision on holding a tender for small HPPs. The head of the department Duishenbek Zilaliev stated that he was ready to personally be responsible for the successful implementation.

Soon, representatives of Iran expressed their readiness to build stations here. But their dreams did not come true.

The process was launched only at the end of March 2017, when Prime Minister Sooronbay Jeenbekov approved the regulation on the tender for the right to build small hydropower stations.

And already in May, the State Committee for Industry, Energy and Subsoil Use announced a tender for the construction of small hydropower stations. The deputies of Parliament spoke out against the announced contest. According to Kurmankul Zulushev, the decision contradicts the law on electrical energy industry. Many people by themselves buy land to build small power plants there. Recently, a mini-hydropower plant for 3 megawatts was built in Kemin. And then the officials decided to set up small hydropower plants for a tender.

Its first stage was held on June 15. During the tender commission meeting, at the opening of the documents, it was found out that six companies filed applications for 11 cross-sections. The scandalous Liglass Trading was among them. Two weeks later, on June 30, following the results of the second round of the tender, the Czech company was recognized the winner and was given the right to build ten out of eleven small hydropower stations.

What does it have to do with the cascade?

In January 2016, the President of Kyrgyzstan signed a bill on the denunciation of an agreement with Russia on the construction of the Upper Naryn cascade of hydropower stations. After two years of talks and the first timid attempts to begin construction in Naryn region, Kyrgyzstan owed $ 37 million to RusHydro holding. It was reported that the money was spent on the construction of a shift camp, a concrete plant and a crushing plant. However, MPs believe that the amount is too high. They created a special commission and went to the construction site to study the situation.

On August 10, 2016, Kyrgyzstan finally terminated the agreement with Russia on the construction of the Upper Naryn cascade and Kambar-Ata HPP-1. Since this moment, officials of all colors and ranks were saying: very soon, we have to suffer a little and a new investor will be found. Days, weeks, months were passing by but there was nobody wishing to build the station.

Almost a year later, during the state visit to Russia, Almazbek Atambayev said that the investor for the cascade has almost been found and an agreement would be signed in July. By that time, the first round of the tender for small hydropower plants had already passed. His words were confirmed also by the head of the State Committee for Industry, Energy and Subsoil Use Duishenbek Zilaliev, but he did not name the company.

Everything fell into place in 10 days. Duishenbek Zilaliev signed a contract with Liglass Trading for the construction of ten small hydropower stations and two stations of the Upper Naryn cascade.

There are some plans but no money

It would seem we have to rejoice. But civil activists and journalists suspected something wrong and began finding out. The Czech media also decided to find out who exactly hit such a jackpot. A scandal broke out.

It turned out that the company is very dubious; there is practically no money on its accounts. And Liglass Trading itself has never built any stations, but did a little of everything to earn for living.

From bad to worse, it turned out that the Foreign Affairs Ministry repeatedly warned the authorities that it is dangerous to cooperate with Liglass Trading. But officials ignored the appeal. They did not particularly worry even after the outbreak of the scandal. The same Duyshenbek Zilaliev urged to calm down and wait for the Czechs to pay everything and start construction.

Even representative of the firm Jiří Wojciechowski came to Kyrgyzstan. He assured that Liglass Trading would build the cascade, and $ 37 million will be given to RusHydro. Later on, official statement on the scandal appeared on the company’s updated website.

Even President Almazbek Atambayev had to comment on the happenings. And the owner of Liglass Trading Michael Smelik said that everything was clean and transparent, and he himself had been for several years on the market. The Czech investor assured the press that he would certainly answer all questions on July 26. But he deceived. Michael Smelik did not hold the promised press conference.

Shareholders of the National Energy Holding should approve the agreement with Liglass Trading on the construction of two stations of the Upper Naryn cascade on August 4. A countdown of 30 days for the payment of $ 37 million to RusHydro will start from this date, the president said. But Michael Smelik himself, after signing the agreement on July 10, stated that 30 days would be counted since July 11. And it is not clear again, whether this story will end on August 22, or even in September.