Банкеръ Weekly

Briefs

PRIVATISATION IN ENERGY SECTOR IS KNOCKING ON THE DOOR AGAIN

The Privatisation Agency (PA) and the Czech company Energo Pro are still waiting for the ruling of the Supreme Administration on their dispute regarding the sale of the Sandanska Bistritsa cascade. Last week's events, however, poured additional water into the mill of the foreign investor after the PA opened procedurure for the divestiture of another six cascades and 21 self-contained hydroelectric power plants (HPPs). They are to be sold through open bidding tenders.The problem is that the deal on Sandanska Bistritsa was stopped with the argument that a strategy for privatisation in the energy sector should be prepared before that, the law for that branch should be amended, and a new strategy for the development of power engineering till the year 2010 should be drafted. But no documents in that respect have been publicly discussed yet, much less have been approved and enforced. Nevertheless, the PA initiated new procedures for divestment of HPPs. Thus, the reasons for revoking the deal on Sandanska Bistritsa, pointed out by Levon Hampartsumyan when he headed the PA, have obviously dropped out. Otherwise, someone could ask the question why an energy strategy is necessary for some sales and is not needed for othe ones. The double standard could repulse not only Energo Pro, but other potential foreign investors as well.Another explanation is possible too - about a new start of privatisation in power engineering. But then the contract with Energo Pro should be signed, independent of the outcome of the lawsuits. Otherwise, the Czech will have good reasons to doubt PA's impartiality.Quite a number of experts were also surprised by the statements of Deputy Premier and Minister of Economy Nikolai Vassilev that as early as in the beginning of 2002 the State would launch for sale on the stock exchange minority packages of the Varna thermolectric power plant (TPP) and of most of the domestic electricity distribution companies. In the plans of all former governments the Varna TPP was a strategic reserve for the country's energy system (together with the Chaira power station) and were not listed for privatisation.In any case, without an approved strategy the potential buyers of HPPs and of the Varna TPP will not practically know what they are bidding for, because the prices at which the electricity generated by the power plants will be purchased in the long term, are not not known yet. So, not a single investor can calculate the ruturn on investments.

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