TIRANA, Oct. 15 – Albania’s Supreme State Audit has filed criminal charges against Energy Minister Damian Gjiknurki and the General State Advocate Alma Hicka over their role in the compromise solution to the dispute with a Czech company, CEZ, which auditors says has cost Albania’s state budget 479 million euros.
The two incumbent officials have been sued for abuse of power under article 248 of the Criminal Code and risk up to seven years in prison if found guilty.
The Supreme State Audit says the Albanian government lost 95 million euros it agreed to pay to CEZ in compensation for its revoked licence and some 352 million euros that CEZ’s unit in Albania owed to KESH power corporation in electricity purchases and OST transmission operator in transmission fees.
The amount of Euro 95 million is irrecoverable damage because of the recognition of undocumented obligations of which Energy Minister Gjiknuri is responsible as the head of the working group negotiating with CEZ, says the Supreme Audit.
The audit also unveiled the Albanian government lost 32 million euros from depreciation of the 24 percent state-owned stake which was valued at 32 million euros in 2009 when CEZ took over a 76 percent stake for 102 million euros. The minority stake held by the Albanian government was valued at zero in 2013 when CEZ had its licence revoked and the company had accumulated hundreds of millions of euros in debts.
The Supreme Audit says the amount of damage does not include the extra costs the Albanian government will have to handle to bring the public operator under normal financial parameters.
The lawsuit comes more than one year after the Albanian government and the Czech giant reached an amicable out-of-court solution over the Albanian distribution system which the Czech giant managed for three and half years until early 2013 when it had its Albania licence revoked over mismanagement.
In mid-2014, the Albanian government agreed to pay CEZ in annual installments in the next four years a total of Euro 95 million, an amount slightly lower to its initial investment in the Albanian distribution system, but half of the Euro 200 million CEZ had warned it would claim in international arbitration proceedings.
The CEZ affair has also recently heated up Albania’s political scene. New revelations involving the botched privatization of Albania’s power distribution monopoly and corruption allegations in contracts the company had with third parties have led to calls for an international investigation.
New facts show CEZ Shperndarje, then privately owned by a Czech company and now state-owned and re-branded as OSHEE, paid more than 4 million euros to International Debt Advisory, a company owned by Kastriot Ismailaj, who is currently in jail on money laundering charges.
In late 2014, the Albanian government launched a nationwide campaign to cut off illegal connections which were made punishable by prison and collect accumulated unpaid bills which has brought the state-run distribution operator an extra 100 million euros in income.
Gjiknuri’s reaction
Reacting to the report, Energy Minister Gjiknuri described the report as legally unfounded and based on accusations by the opposition Democratic Party which was in power when the privatization of the distribution system took place in 2009 and the revocation of CEZ’s licence in 2013.
He accused the head of the Supreme State Audit Bujar Leskaj of serving the opposition Democrats who proposed and approved him as head of Supreme Audit.
“The report has a complete lack of the legal and financial analysis and causes that led to this conflict to unveil concrete responsibility of institutions and people in charge who with their actions and inaction before and after the revocation of the licence led to this conflict which regarding the amount of money and issue could have potentially seriously infringed the security of electricity supply for Albanian consumers,” said Gjiknuri.
Gjiknuri said the deal with CEZ was the best solution to the Albanian electricity system and was supported by the World Bank, the IMF , the EU and the Energy Community.
