The new tender is estimated at around Euro 90 million considering last year’s average prices of Euro 68/MW
TIRANA, August 6 – CEZ Shperndarje distribution operator, currently under state administration after giant CEZ Group had its Albania licence revoked, has announced it will hold a huge tender on the purchase of electricity for the whole of 2014 in mid-September just before a new government takes over. CEZ’s state administrator Sahit Dollapi says the distribution operator intends to purchase 1.3 million MWh of electricity in imports to cover its grid losses for 2014. The distribution operator says it admits bids until September 10 while the winner will be announced five days later on September 15.
The new tender is estimated at around Euro 90 million considering last year’s average prices of Euro 68/MW. In the new tender, the contract with the electricity supplier foresees that CEZ can pay electricity bills within two months. The contract also envisages that CEZ can reduce the amount of electricity imports by 20 percent in case of favourable hydro-situation and by 30 percent during March-May 2014, local media report.
The announcement of the new tender comes at a time when a new Socialist Party-led government takes over, but CEZ has described it as a normal procedure securing electricity for next year. The Socialists have accused CEZ’s state administrator Sahit Dollapi of abusing CEZ Shperndarje and politically using it during the electoral campaign for the June 23 elections which the Socialist Party-led coalition won by a landslide. While Dollapi’s appointment depends on the Energy regulator ERE which also appointed him as the company’s temporary administrator last January after the Czechs had their licence revoked, the warned restructuring of the company is expected to sack Dollapi, known as a supporter of the Democratic Party.
Meanwhile, Albania faces an international trial with CEZ Group which was stripped of its Albania licence last January because of failing to meet contract obligations.
Czech Republic-based CEZ Group, whose Albanian power supply subsidiary CEZ Shperndarje, was stripped of its licence last January, says it has officially initiated international arbitration procedures to claim compensation for the damage incurred in Albania. CEZ says it will claim Euro 200 million in international arbitration while the Albanian government claims that CEZ’s failure to fulfill its contract obligations over imports, investments and reducing grid losses caused the state USD 1 billion in damage.
“The arbitration proceedings have been formally initiated by sending a ‘notice of arbitration.’ However, this does not prevent a potential out-of-court settlement between the parties.”
The CEZ Group entered the Albanian market in May 2009 by acquiring a 76 percent equity stake in the Albanian power distribution company for Euro 102 million.
CEZ blames the situation in Albania on tariff disputes with the Energy Regulatory Entity and heavy fines imposed by local authorities.
CEZ resumes electricity imports
CEZ state administrator Sahit Dollapi has announced the resumption of electricity imports to cover grid losses for August after appeals by both KESH Power Corporation and Energy regulator ERE over the risk posed to the country’s hydro-reserve during this drought period.
CEZ Shperndarje distribution operator says it will import 200 mln kWh of electricity for August to cover the country’s needs and grid losses. The CEZ administrator said the company targets improving its bill collection indicators. Without providing concrete figures, Dollapi said the bill collection rate improved last July. As far as grid losses are concerned, Dollapi said they dropped to 40.3 percent in July 2013 compared to 51.2 percent last January when the company was run by the Czechs. Dollapi also assured of 24/7 electricity supply in coastal areas and warned debtor customers will have power cut.
In its report on the monitoring of CEZ’s performance for the first half of this year, Energy regulator ERE has raised a series of concerns especially regarding the procurement procedures for electricity imports and the company’s field work. ERE is concerned over CEZ’s lack of transparency for its electricity import procedures and the increase of bills with a monthly zero kWh consumption. CEZ’s financial situation is expected to aggravate next winter when electricity consumption increases and grid losses rise as well. This is also accompanied by higher electricity import prices.
Public institutions warned of debts
Public institutions as well as water supply enterprises which owe debts to CEZ Shperndarje have been given a deadline to pay outstanding debts to CEZ Shperndarje until August 7, otherwise they will have power cut. The Company has not made public the list of debtor institutions but only issued a statement appealing to them for the payment of bills until August 7. CEZ’s threat comes at the peak of the tourist season at the same at when a year ago, CEZ run by the Czechs launched a campaign to punish all debtor institutions and consumers by cutting power to them. During this campaign, employees of the Czech company faced protests and were also involved in direct confrontations with local inhabitants. The campaign continued until November 2012 with the cut of power to water supply enterprises in Elbasan, Lac, Durres and Saranda. Under these circumstances, Albania’s Energy regulator ERE was forced to revoke the licence to the Czechs, making official the failure of the country’s most strategic privatization and shifting the distribution operator back into state administration.
The debts these institutions owe to CEZ date back to the previous administration run by the Czechs. In November 2012, CEZ was forced to cut power to all debtor institutions and water supply enterprises but encountered the immediate resistance of government which did not allow the cut of power to debtor water supply enterprises, calling it a threat to public security. The debt these institutions owed to CEZ at that time reached Euro 38 million and the company had often appealed for its payment.
