Albania rejects Czech power compensation claim

TIRANA,Feb 9 – Albania’s energy ministry has described a 200 million euro compensation claim by Czech state-run power utility CEZ as unfounded, after the company lost its license to distribute electricity in the small Balkan nation.
The ministry accusedthe company of bad management and defended the country’s decision to cancel CEZ’s license.
CEZ is seeking international arbitration against the Albanian state power regulator, ERE, after the government resumed control of the national grid last month.
Thedispute between Albania’s government and CEZ over unpaid bills and investment pledges led to water supply cuts and daily rolling blackouts.
CEZ bought 76 percent of the grid operator for 102 million euro in 2009.
For the moment it seems that the new management from the Tirana government has had significant improvement of the system. There are less power cuts.
It remains to be seen whether this is a strenuous effort at this moment ahead of the parliamentary elections in June, or a real management upgrading.
Besides the government should also try and find good lawyers to defend it at the international arbitration court.
And this dispute also bears the probability of hampering the country’s progress toward the European Union membership.
CEZ is owned by the Czech government, which has expressed anger at the way its license was revoked.
Albanian officials believe that the country’s integration efforts in the EU will be unaffected by the energy authority’s decisionas they consider that a “problem of commercial nature,” according to Foreign Minister Edmond Haxhinasto.
Of course that is commercial issue but one affecting both countries.
Petr Necas, Czech prime minister, said the dispute may hurt Tirana’s EU integration chances.
“To be part of the EU, Albania must show it is a country that respects the rule of law. The basic prerequisite for any country aspiring to become a member of the Union is the ability to secure the rule of law and a healthy investment environment, including protection of foreign investments,” Necas said.
NATO membership and EU integration are an important element for growing foreign investments. Big company experiences, like that of CEZ in Albania, also are a main indicator of a country’s commitment to offer conditions on a successful business development.