THE RESTRUCTURING OF BULGARIAN ENERGETICS WILL STRENGTHEN ITS LEADING POSITIONS IN THE REGION
Mr Kovachev, Bulgarian government has taken the engagement to preliminary close up the third and fourth blocks of Kozlodoui nuclear plant which caused plenty of negative comments in the country to appear. How will you comment on the fact being not only a minister, but also an engineer, who had started his working career exactly in this nuclear plant?- When speaking about the Kozlodoui nuclear plant three key moments cannot and must not be spared - and exactly these moments have determined the destiny of the first four small blocks (each with power of 440 MW).The first point dates back to 1991 when in one very critical report (filed after a series of missions of EU experts at our nuclear plant) numerous security problems were brought out in the open. The second one is the 1993 agreement by which for the first time the Bulgarian government officially promised to close the four small reactors of Kozlodoui nuclear plant. Indeed, the promise was given on condition and against EUR24MN free aid which money, however, was soon spent away.The third moment concerns the so-called memorandum signed in 1999 by which the Bulgarian Cabinet took clear engagements to close the blocks. That means that by 2002 when the Energy Chapter was closed, all Bulgarian governments so far had confirmed our country's engagement to close the small blocks. Yes, but you turned out to be the executors!?- I don't think that your definition is precise. But it's true that we had the chance to fulfil all the promises and taken engagements of all the previous Bulgarian governments. And from Brussel's and from the whole world's point of view the Bulgarian government is one and the same, regardless the fact that the Prime Minister is called Lyuben Berov, Ivan Kostov or Simeon Saxe-Coburg-Gotha. Nevertheless, I can state from the position of both minister and experts that for the last two years we managed to cover all the recommendations which had been tracking us during the whole transition period. The tasks set still in 1991 in the first notes of the Atomic Questions Group to EU were written in as an engagement during the 2001 negotiation period. In November, 2002, it was reported that those tasks had been fulfilled. A brand new nuclear legislation was imposed, the regulatory organ (The Agency for Nuclear Regulation) was strengthen, the programs for modernization of the second two small blocks were brought to an end and an overall analysis about their safety was presented. The achievements also were confirmed during the last safety checks at the nuclear plant carried out by the International Atomic Energy Agency (IAEA) in 2002 and by the Atomic Questions Group in 2003. We shouldn't think, however, that these actions, though having made the political dialogue more objective, have changed the political way of thinking.A clear proof of this is the voting of the report on Bulgaria's progress which took place last week (March 25) at the European Parliament. It is known that slightly before the final voting to take place, an amendment was proposed which concerned the achievements at Kozlodoui nuclear plant. The proposal arrived mainly from the conservative part of the EU Parliament: that is from the European People's Party and from the centric and right-wing formations. But at the voting at Strasbourg prevailed the left-wing and green formations and the amendment was cancelled. Practically thus we were able to evaluate the interrelation of the European political forces. Most of them are sharing the position that regardless all achievements Bulgaria must fulfil the plain and simple engagement to close the third and fourth blocks of Kozlodoui nuclear plant. So the voting at the European Parliament confirmed for a next time in a row the 1999 opinion that the problem does exceed the simply technical frames and reflects the attitude of the countries-members of EU to the atomic energy as a whole. And this attitude is a dynamic process in its own.In this case is it worth hoping that a new body of members of the European Parliament ( or of the European Commission) after the elections in June, 2004, might reconsider the fate of the two blocks?- Let's not enter into assumptions. After all the green and left-wing formations are still prevailing in the governments of the countries-members of EU. Moreover, for years the countries which are developing the nuclear energetics have grown a negative attitude towards the blocks of the Bulgarian nuclear plant which do not cover the modern safety requirements. Therefore, for the greater part of the EU governments this question will better be closed and it better be said: this is the end, all nuclear blocks which will be exploited henceforth in Europe are safe.The deal about the Bulgarian Electricity Distribution Facilities caused plenty of commotion at the London City and attracted five of the biggest and most respected companies in Europe. Don't we face the common danger to get drowned just before the end?- I don't share any such fears. Simply because all the conditions of the deal itself and its rules are good. From one hand they are defined in details, they are transparent and clear. There is no place for any back-door agreements and negotiations. From the other hand this deal comes up to the public needs and relationships. It is practically an infrastructural sale where along with the assets are also sold rights and obligations.I would also like to underline that one transparent privatisation deal of high quality is not only necessary, but absolutely possible in Bulgaria. I dare claim that we in the energy sector have taken up the burden to realise it. In this way of thinking the introduced amendments to the Privatisation Act will also play a positive part. They mean greater responsibility at the presentation and the defence of clear privatisation strategies concerning the different enterprises in the sector. However, I'd offer you to continue this conversation in the second half of the year when according to me all the deals for the Bulgarian electricity distribution facilities will have to be ended. Along with the privatisation of the electricity distribution facilities you are also uniting production assets and aim at creating one state-owned electricity consolidation company. Is this not a contradiction?- Let's track out the origins of this idea. In 2000 we took the first step towards structural reforms in the sector - the judicial differentiation of the electric energy sector. Today it works according to clear commercial rules and all relationships inside the sector have their transparency and clarity.Exactly this differentiation and the experience from the last four years increases the necessity of further consolidation. Because today, within the developing regional market and viewing the profit and loss accounts of every company in Bulgaria, it becomes clear that we are the only country in the region and, dare say, in Europe, which has production companies based around one central power only. And in 2006-2007 when NEC's natural monopoly on the energy trading drops off in a regional energy market and in the conditions of a liberalised trading according to EU directives, then these weak companies of ours will turn out to be in a competitive environment and facing such powerful integrated companies as the Greek one, the three Romanian companies, the Turkish one and even the unreformed companies of former Yugoslavia. Further in the West there are the Czech CEZ (partly reformed, but also integrated), the Slovenian Electrical Company, the Hungarian MEM, the German RWE and EON, the French EdF and the Italian Enel. That means that after 2006 we will turn out to be the only country with generating companies, exploiting one power plant only. The movement towards consolidations then appears quite logical. Whether the different powers will be consolidated together or in groups is a matter of concrete decision which we will promptly offer. But in this plans it seems absolutely logical that towards one basic power as Maritsa Iztok 2 or Kozlodoui should be added some of the undertop or top powers - one of the cascades e.g. which are presently supplied with pumping-accumulating stations. Both sides of the future consolidation are completing each other mainly at giving the opportunity for competitive participation in the market at different price levels.To sum up, the privatisation, consolidation and the overall restructuring of the Bulgarian energetics will confirm its leading role not only on the Balkans, but also in South-Eastern Europe.