• INVESTIGATION: Biomass Heating: The Story of a Local Failure Funded with Millions of Euros by Japan

    INVESTIGATION: Biomass Heating: The Story of a Local Failure Funded with Millions of Euros by Japan
    by
    01 November 2021 | 15:25


    While the authorities are looking for alternative solutions to Russian gas, 15 km from Chișinău, a pellet production plant, which was to provide heat to several public institutions, has been out of order for more than six years.

    7.6 million euros, money from grants provided by the Government of Japan, were buried by the Chișinău authorities in the construction of the Pellet Production Plant and the installation of 25 biomass boilers, 24 of which were to produce thermal energy to heat as many public institutions in Moldova. Although the boiler rooms and the factory were built, six years after the official launch, the project is practically non-functional. Biomass-based boilers are used in only a few localities, and the pellet production plant, which has swallowed almost 3.5 million euros, is sinking into accusations and the inability of all governments in recent years to find solutions to make the plant work.

    Initially there were interests, then incompetence. In short. The biggest problem is that they did not know how to steal from here,” sounds one of the accusations brought to the Minister of Agriculture of that time.

    July 30, 2015. Nicolae Timofti, the country’s president, accompanied by several members of the Government, arrive in the Pașcani commune, Criuleni district, a locality 15 kilometers from Chișinău. The head of state is greeted by Vasile Bumacov, the technical director of the Implementation and Administration Unit of the Moldovan-Japanese 2 KR Project. On that day, with the support of the Government of Japan, which offered a grant totaling about 12 million dollars, the first biomass pellet production plant was launched in Moldova. The factory was to process agricultural residues to reproduce pellets, which were later to be used to produce heat, replacing traditional heating methods.

    Pellet production plant, non-functional

    In 2021, hundreds of state institutions, including schools or kindergartens, were at risk of running out of heat due to the gas crisis. Six years after the launch of the pellet production plant in Pașcani commune, which was to propose a real alternative to natural gas heating for several dozen public institutions, it is still NOT active. In fact, it never worked properly, with equipment that cost millions turned on just for testing. Today, the security guard on the territory is the only one that talks about the fact that the plant is valuable. At least on paper, the buildings and equipment inside cost about 3.5 million euros.

    Ilie Bucuci has been the director of the Center for Improvement in the Field of Agricultural Mechanization for several months, an institution that operates under the Agency for the Development and Modernization of Agriculture and which managed the plant, shortly after it was put into operation. He claims that the plant is not functional because the project started, from the beginning, with several shortcomings.

    “When it was put into operation, colleagues from Japan came to see how it works. They turned it on. And that’s all. You see, everything is new here. So in 2015, the plant worked for an hour. The mechanisms were turned on whenever our colleagues from Japan came to see how it is going, the local managers were looking for ways to show that the plant works,” says Bucuci.

    The construction of the Pellet Factory was part of the project “Efficient Use of Solid Biomass Fuel”, managed by the Implementation and Administration Unit of the Food Production Growth Project, the current Agency for the Development and Modernization of Agriculture, an institution subordinated to the Ministry of Agriculture and Food Industry.

    3.5 million euros invested in the construction and equipment

    The factory was built by the Lincons company, only the raising of the buildings costing about 1 million euros. The technological line used cost another 2.5 million euros. Ilie Bucuci states that, in 2018, “the Chamber of Commerce and Industry was asked to see once again how much the building costs – the real cost of the business. The technological line cost on documents as much as 2.5 million euros, while in reality, it is 750,000 euros. This is what the Chamber of Commerce found, after the evaluation.”

    ZdG: You mean, this project didn’t really cost 3.5 million euros?

    Ilie Bucuci: Yes, obviously.

    For six years, the authorities did not find solutions for the Pellet Factory to become operational, passing, each time, its responsibilities. In 2016, after the Democratic Party led by Plahotniuc took over the government, through a civil society contract, the factory came under the management of the Energ Pellet company, founded and managed by a young man who was then 27 years old, Alexandru Țurcan, now employed as a manager at the Acvila Grup company, owned by the family of businessman Nicolas Nicula. Țurcan ran in the parliamentary elections in July on the lists of the Built Europe Home Party, led by former police officer Gheorghe Cavcaliuc. Five months after the signing of the contract, however, it was terminated, the factory returning to state ownership.

    “It doesn’t deserve to remain like a historical monument”

    Now, to restart it, about 1 million euros would be needed, say people involved over time in the process of managing and implementing the project. “At any cost, we want it to start working. It’s a shame. It does not deserve to remain a historical monument, especially nowadays when we have big problems with gas, we are talking about alternative heating systems,” says Ilie Bucuci.

    “When it was, planned, it can be seen that the real situation on the market was not taken into account. First of all, it is hard to find raw material for such a factory, with such capacities, to work 24 hours a day. The second is the cost of the finished product. The cost of the finished product consists of the actual cost of the factory. It costs around 3.5 million euros and, respectively, the price will not be competitive one on the market,” mentions Bucuci, referring to the fact that the legislation during the project implementation provided for inclusion in the price pellets and investments in factory construction.

    In other words, when setting the market price of pellets, the cost of the factory was to be taken into account, and because it cost about 3.5 million euros, the cost of pellets would have been well above the market average. In order for the factory to produce pellets at market price, a special law had to be passed, which did not happen.

    The second stage of the project: 4.2 million euros for 25 biomass boilers. Only 9 are in use

    The Efficient Use of Solid Biomass Fuel project did not consist only in the construction of the Pellet Production Plant. The Japanese government allocated another 4.2 million euros for the purchase and installation of 25 biomass boilers, of which 24 were to supply public institutions, especially schools. The biomass boilers, ideally, were to be fed with pellets produced at the factory in Pașcani. But the reality here was different from the initial plans.

    “Out of 24 boilermakers, only 9 work. The rest were not put into operation, the activity was not completed. The relations between the town hall, the school, the responsible ministries are not very good. It was a very good plan then and we are grateful to the Government of Japan for supporting it. At the political level, what happened is another question. How those town halls were selected, where the respective boilers were placed, how they were put into operation, is another question. Around 4 million euros were invested there. Enormous, enormous amounts,” states Ilie Bucuci.

    “That’s not it, no logic. It coincided with the closure of the institution “

    The biomass-based factory in Mășcăuși, Criuleni district, is one of the 15 such factories in the country that do not work, although each cost about 1.7 million euros. In Mășcăuți, the biomass-based boiler was to produce thermal energy for two buildings – the school and the town hall, located next to each other. However, shortly after it was installed, the authorities decided to close the school, merging it with another educational institution, and the City Hall was connected to gas. Thus, the biomass boiler remained only at the project level. And it has been out of order for several years.

    Valeriu Carten, the mayor of Mășcăuți commune, claims that when the project was initiated, it was not known that the school that would benefit from the biomass boiler would be closed. Valeriu Cartin says that, if possible, he would like to bring the boiler room to the other school, but he is skeptical about the effectiveness of this process and believes that it would be best to heat the House of Culture near the boiler room, although the project was created for the school.

    “I have nothing to tell you. We don’t want to talk to the press.”

    In the village of Micăuți in the Strășeni district, the biomass boiler house is located in the immediate vicinity of the school. However, the educational institution prefers to use natural gas for heating, and the biomass boiler has never even been connected. The director of the Gymnasium from Micăuți refused to discuss the subject, only telling us that she prefers the heating of the institution based on gas. And the mayor of the village avoided talking about it. Angry with the journalists, he asked us to send him the questions in written form. Vasile Dolghii has been the mayor of Micăuți commune since 2011. “In the written form, you will address me and I will give you an official answer. I have nothing to tell you. We don’t want to talk to the press.”

    “We have straws, sunflower sticks, and that’s very good”

    Ivancea commune in Orhei district is one of the few localities involved in the project that uses biomass boilers. In Furceni, a village that is part of the commune, the biomass boiler has heated the village kindergarten until this year. Starting this year, it will also heat the local school.
    Also in Brănești, a locality that is also part of Ivancea commune, the biomass-based boiler works, and the mayor of the locality states that, if desired, the biomass-based boilers can be a real solution to provide thermal energy.

    “There was no difference between gas and biomass boilers when gas was cheap. But, considering today’s situation regarding energy efficiency, it is clear that biomass boilers are more welcome. We are very satisfied. There are no problems with the raw material. We preferred the person who is here in our district to make pellets. It’s good, the price is good. That’s why we have no problems at all. We have straws, sunflower sticks, that’s very good. Why do we have to set them on fire somewhere on the hill when we can use them and do a good thing? That’s the most important thing we can do. Why spend gas if we can use the biomass, especially since now there is a crisis and it is not known what will happen next,” states Boris Ochișor, the mayor of Ivancea commune.

    Most of the mayoralties that benefited from the project were represented by Liberal Democrat mayors

    The construction of the pellet plant in Pașcani and the installation of the 25 biomass boilers was done under the umbrella of the ruling Liberal Democratic Party of Moldova, and at least 16 mayors, who were selected to benefit from the project, represented this party. In other cases, the directors of schools that benefited from the project were affiliated with the then ruling party.

    Valeriu Carten, the mayor of Mășcăuți commune, claims, however, that he did not feel that he was favored and that he would have obtained the project only because he represented the Liberal Democratic Party.

    “I was in the Liberal Democratic Party, but that didn’t matter. I don’t know, in fact, about the other 23, if they are all from the Liberal Democratic Party,” states the mayor.

    Bumacov: “They didn’t know how to steal from here”

    Vasile Bumacov, the Minister of Agriculture during the implementation of the project and one of its craftsmen and promoters through the Agency for the Development and Modernization of Agriculture, where he was technical director after leaving the ministry, says he is not to blame because most biomass boilers, but also the pellet factory, in which over 7.5 million euros were invested, are non-functional today. He is sure that if he stayed at the Ministry of Agriculture, the project would have become functional.

    “I elaborated it, I implemented it, I did everything and I gave them the factory ready. But I left the ministry. While I was at the ministry, the center worked and the factory worked too. I left the ministry, and it was over. Do you realize how much effort it took to clean up all the dirt, build it and what effort it takes for it to work? It’s not a problem for it to work,” says Bumacov.

    “It does not work due to the incompetence of the agriculture ministers who followed me. Initially, there were interests, then incompetence. In short. The biggest problem is that they didn’t know how to steal from here. That’s the biggest problem. They don’t see how they could make money here,” believes the former official.

    “Do you know the price of the first car when it is produced, do you know how much it costs? It becomes cheaper later”

    Vasile Bumacov claims that the cost of the project should not be discussed because the money was provided free of charge by the Japanese, the project in Moldova being a pilot one, later successfully replicated even in Japan.

    “When a pilot project is made, that this is not mass-produced, it is a new product, it can never be cheap, this must be clear. It was generously provided free of charge by Japan to Moldova. What’s the point of being expensive? It was an auction, based on the auction it was done, the Japanese company won, it was monitored by the relevant institution. The accusations of a man who had no contact with this factory, who never worked here, who did not make a project in his life, to accuse the Japanese of giving expensive equipment, is stupid,” says Vasile Bumacov.

    ZdG: The accusation is that it would cost less than what is written in the documents.

    Vasile Bumacov: Do you know the price of the first car when it is produced, do you know how much it costs? It becomes cheaper later.

    “I warned them – be careful, because there are mayors who speak very nicely, but they won’t do anything”

    The former Minister of Agriculture states that he would not have been involved in selecting the mayoralties that benefited from the construction of biomass boilers, and the fact that most of them represented the Liberal Democratic Party would be just coincidences.

    “It is an official letter from Japan that they confirmed that all the mayoralties were selected by the Japanese. I didn’t go to any of them. I was a minister then and I didn’t want any problems or speculations. If I went to another party, people from the Liberal Democratic Party would make noise, if I went to the Liberal Democratic Party, the others would make noise. I had a deal with the Japanese. As long as I’m a minister, I don’t get involved, but I warned them – be careful, because there are mayors who speak very nicely, but they won’t do anything. You will install a boiler, you will do everything that is needed and they will not connect it to schools and kindergartens. And so it happened,” says Bumacov, who is sure that if the factory had been managed by the Agrofermotech company, a company managed by his former colleagues or business partners, it would have worked since its launch.

    The company, an affiliate of Bumacov, was the one who contributed to the installation of the pellet factory equipment.

    “It simply came to our notice then. The Japanese, when they finished the work here, officially stated that we consider that such a new, high-performance machine can only be managed by the team that worked with us all this time. Day and night they all worked together here. That’s what they proposed. But Sclifos, the administrator of Agrofermotech, was immediately warned not to step here. And the man did not come. And since then we can’t do anything. No matter who will come, without Sclifos we can’t do anything. Who’s going to handle this whole thing? If they do something wrong and the matrices will come out of operation, other components will come out of operation and we will have to pay big money to repair it,” says Bumacov.

    The Agrofermotech company was founded in 2001, the year in which the 2KR project was founded, by Sergiu Sclifos (40%), business partner and former co-worker with Vasile Bumacov, Anatolie Prisacaru (40%), his father Dan Prisacaru, Vasile Bumacov’s son-in-law, and Valentin Gaberi (20%), Gheorghe Gaberi’s son, who later became Deputy Minister of Agriculture and director of the National Agency for Food Safety during the period when Vasile Bumacov was Minister of Agriculture.

    “Do you realize how stupid do we look here?”

    Sergiu Sclifos, the administrator of the Agrofermotech company, confirmed, in a telephone conversation with ZdG, that he had been summoned by the representatives of a state institution to give up the management of the pellet factory. He believes that the project does not work because the state has avoided contributing money to it, and around it, over the years, there have been several interests and struggles to manage the factory.

    Ion Sula, the Minister of Agriculture who succeeded Vasile Bumacov, informed us that he is not ready to discuss the subject, and Eduard Grama, the one who came to office after Sula, passed the responsibility for the non-functionality of the project on the shoulders of his predecessor.

    “This project was made during Mr. Bumacov’s time and remains with Mr. Bumacov,” says Grama.

    “Do you realize how stupid do we look here? The Japanese came and gave it to us for free, and we sit and look at each other and look for culprits,” concludes Vasile Bumacov.

    The total cost of the Efficient Use of Solid Biomass Fuel project is 7.5 million euros. A plan which included the construction of the Pellet Factory and installation of 25 biomass boilers. All the money came from grants provided by the Government of Japan. The way this project was managed is investigated by the General Prosecutor’s Office in a criminal case.

    AUTHOR MAIL eng.zdg@gmail.com

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