TIRANA, June 5 – According to the IMF, unpaid bills are the fundamental problem plaguing KESH. Mumtaz Hussain, an economist working for the International Monetary Fund, said that during 2007, KESH managed to collect only 50 percent of the value of electricity pushed into its power grid. It is calculated that 20 percent of the 750,000 Albanian families using electricity do not pay their power bills. Hussain said that, despite countless programs and plans, progress in collecting unpaid bills is limited.
However, the CEO of KESH, Gjergj Bojaxhi, defended KESH and its progress and blamed the Albanian Power Regulatory Board (ERE) for failing to help KESH achieve its goals. He said power prices should increase from ALL 8.1 per kWh to ALL 9.78 per kWh. Bojaxhi complained that ERE has not provided KESH with a clear cost analysis of power prices. ERE has mistakenly calculated the average power price in Albania at ALL 8.45 per kWh while the correct price is ALL 8.1 per kWh and, therefore, the revenues of KESH is lower than calculated.
The experts claim that ERE refused to increase the power price because of pressure from Prime Minister Berisha. ERE, although appointed by the parliament, is under the control of the government. In 2006, for example, ERE decided to increase power prices. However, ERE retracted its declaration after Prime Minister Berisha declared that there was not going to be any price increase. Berisha rejected, in 2008, another bid to increase the power price more than 15 percent and ERE simply abided by his decision. ERE repeated in April that it shall not increase prices during 2008.
Further, Bojaxhi said the public prosecutor and other state institutions should help KESH to discipline those who refuse to pay and continue to steal power. “We are not talking here about fines, nor the cutting of illegal power lines, but about those cases that are reported to the public prosecutor. The system does not work if consumers are able to reconnect to power lines. How many people have you heard are imprisoned because they connected to the power grid without permission? Zero! The public prosecutor has begun to move ahead, but the justice system is lagging behind, because it is not punishing this social phenomenon, it is not punishing concrete cases”, Bojaxhi said.
KESH is still in the red
KESH is predicting that it will lose some Euro 135 million this year. “The financial situation of KESH is worsening and the government should look at it and take its measures”, Bojaxhi said. For the moment, the price of power is lower than its cost. The deficit is going to be paid by the state budget. It means that the Albanian consumer, who paid their own power bill, are going to pay again through their taxes for that part of the population that refuses, or cannot, pay its bills. Ultimately, the national economy loses hundred of millions of Euros every year. In 2007, partly due to mismanagement and lack of rain, KESH was forced to import power worth Euro 200 million compared to just Euro 30 million imported in 2006. Currently, Albania uses 3-4 percent of its GDP to import energy from its neighbours.
The price increase is destined to pay the deficit
In 2001, KESH demanded a price increase by justifying it with the need to pay for its capital investments, i.e. new gas/oil fuelled power stations and improvement in its power grid. The experts considered the plan envisaged by KESH as highly optimistic. However, KESH neither managed to build a single new power station nor improve its power grid. Instead, the funds collected during the period 2003-2006 were used to pay the deficit caused by massive imports of energy in 2007. Now, KESH had completely forgotten the rhetoric of new power plants and improvements in its power lines.
