TIRANA, Jan. 15 – Concerned over the sale of four small and medium-sized hydropower plants, the opposition Socialist Party has filed a lawsuit against their privatization claiming that Euro 100 million has been caused in damage. Speaking after filing a lawsuit with the Tirana Prosecutor’s Office this week, opposition Socialist Party MP Eduard Shalsi said the sale of the Ulez, Shkopet, and Bistrica hydropower plants at euro 3 million per MW comes only few months after government sold the Lanabregas HPP at a price of Euro 3 million per MW to the Tirana Municipality to meet power needs for its water supply and sewerage system.
“Considering the difference in the sale prices, we estimate that Albanians have been caused Euro 100 million in economic damage. We came to demand the prosecutor’s office to investigate into, while Albanians will soon be explained and the truth of their sale,” said Shalsi.
The lawsuit comes after opposition leader warned the Socialist Party would cancel the privatization if it comes to power in next June’s general elections.
“I am repeating to the company to withdraw from the four hydropower plants. This is a privatization we will cancel. We cannot allow that profitable public assets which have been upgraded under Albanian taxpayers’ money are sold,” said Rama at a press conference last weekend.
Turkey’s Kurum International, which in Albania already operates the Elbasan steel plant, offered a total of Euro 109.5 million on the privatization of four small and medium sized hydropower plants, being the highest bidder. In an international tender held on December 21, Kurum International offered Euro 52 million on the purchase of the Bistrica 1 and Bistrica 2 HPPs in southern Albania with a capacity of 27.5 MW and Euro 57.5 million on the Ulez and Shkopet HPPs which have an installed capacity of 49.2 MW.
The Albanian government has already approved the report announcing Kurum as the winner of tender. For Kurum, one of the country’s largest electricity consumers, the purchase of the HPPs will considerably lower its power costs as a new law in force since the beginning of 2012 stripped big electricity consumers to have power supply at regulated tariffs from the local distribution operator.
Gov’t reaction
Introducing the annual report in a press conference this week, Economy Minister Edmond Haxhinasto described the HPP privatization process as successful. “The privatization processes have been carried out in full compliance with the country’s laws. I believe the privatization process of the Bistrica, Ulez and Shkopet HPPs will be successfully concluded so that these assets are better put to use to increase the country’s welfare,” said Haxhinasto.
The minister did not mention Albpetrol and refused answers by journalists on the privatization of the oil firm whose progress has been halted by the payment of the 20 percent contract guarantee by Vetro Energy, the winning consortium which bid Euro 850 million.
Sokol Dervishaj, deputy Energy Minister and head of the bids’ evaluation commission, said the IFC international consultant had valued the four HPPs at Euro 76 million and described the sale of the 5 MW Lanabreagas HPP to the Tirana water supply company for Euro 15 million last year as a completely different process. According to him, the bidder will need to invest another Euro 30 million to rehabilitate the Ulez and Shkopet HPPs.
Penalty risks
If the winning company signs a contract with the Albanian government and the contract is later cancelled Albania could face arbitration penalties. In March 2010, the Albanian government was fined USD 20 million over the unilateral annulment of a 2003 contract, worth Euro 74 million with General Electric. The project cancelled in 2005 was aimed at modernizing the Tirana-Durres railway segment, known also as the electric train, which would have been linked with Mother Theresa International Airport.
