Czech CEZ seeks CZK 22 bln in contract row

...ongoing disputes with a key coal supplier.

CEZ filed a law suit in June demanding that lignite miner Mostecka Uhelna upholds a preliminary agreement from 2005 to sign a long-term coal supply contract with CEZ.

"Today, CEZ expanded this suit by a demand for damages for losses that CEZ will incur in case that there is no long-term contract agreed despite the suit," CEZ said in a statement.

"The damages claimed were calculated by the Deloitte company to be 22 billion crowns," it said.

Mostecka is controlled by Czech Coal, a privately-held energy trader.

CEZ has been seeking the long-term deal to secure supply for a planned new power plant in Pocerady in north-western Czech Republic.

But Mostecka first proposed that the Pocerady plant is a joint project, and later started negotiating with Germany's E.ON on a 1,320 megawatt new plant, sidelining CEZ altogether.

A spokesman for Czech Coal said he had no immediate comment on the new CEZ legal action.

[PRAGUE/Reuters/Finance.cz]