Bulgaria’s National Electricity Company (NEK) received 11 bids for participation in the Yadenitsa dam project works tender, estimated at EUR 350.06 million excluding VAT. Candidates who pass preliminary selection under the negotiated procedure will be invited to submit initial tenders for the construction of a new dam and a 6.7 km reversible pressure tunnel that will expand the lower reservoir system of the Chaira pumped-storage hydropower plant.
Admitted bidders will receive the detailed design, bill of quantities and pricing instructions with their invitation, subject to confidentiality requirements. NEK will negotiate separately with bidders whose tenders proceed to negotiation. The lowest negotiated total price, including contingencies, will rank first.
The draft contract includes a 10% contingency. Payment for unforeseen works requires NEK’s written instruction and approval as well as completion and acceptance.
Bidders should check which ground conditions are assumed in the design and how additional excavation or tunnel support would be instructed and valued.
A third-country candidate may rely on home-country registration and qualifying insurance or a guarantee at selection. At signing, a successful third-country contractor must have the relevant Bulgarian construction registration and professional liability insurance covering the works in Bulgaria.
The conditions provide for a 10% advance, calculated on the tendered price excluding contingencies, backed by a separate advance payment guarantee. The selected contractor will also need a performance guarantee of 10% of the contract value and a guarantee against defects of 5% of amounts paid excluding VAT.
NEK will retain 15% of the monthly value of accepted work with release of funds at commissioning or in stages after signing Form 15 if no defects or outstanding works are recorded. If Form 16 remains outstanding for reasons outside the contractor’s control, half the retention can be released after three months and the balance after six, counted from Form 15 for the last component. Bidders should budget for the timing of cash receipts and the cost of providing the guarantees.
NEK launched the tender under Article 114 of Bulgaria’s Public Procurement Act. Performance starts once NEK confirms financing and the contractor provides the performance guarantee. This gives NEK up to six months after the contractor receives the financing notice to hand over the first site, subject to acceptance of the guarantee and approval of the construction programme.
If funding is still not secured three months after the contract is signed, either party may seek termination without notice. If no funding has been secured after ten months, the contract terminates by law. The maximum 60-month work period runs from formal opening of the first construction site to the record confirming readiness for acceptance of the final component (Form 15).
Bidders should align equipment orders and subcontractor commitments with these milestones.
The government has proposed state guarantees of up to EUR 228.1 million for NEK from the draft 2027 budget. NEK has also applied for a Connecting Europe Facility Energy grant since the project is an EU Project of Common Interest. CINEA expects to notify applicants of the call results in January 2027.
For more information on the works procedure and assistance in preparation for the next stages, contact your usual CMS client parter, the CMS Energy, Projects and Construction team in Sofia or the CMS experts who contributed to this article.
