Race Is On For OSSH

By Altin Fuga
afuga@tiranatimes.com
The Albanian government has decided to privatize OSSH (Power Distribution Operator), a wholly owned subsidiary of KESH (Albanian Power Corporation). Four foreign companies have expressed their interest in buying OSSH including Enel, EVN, CEZ, and Energy Steiermark. The vice minister of Economy, Neritan Alibali declared on June 3, that the privatization commission is going to evaluate the documents supplied by these four companies and will reach a conclusion by June 9. The companies, selected by the privatization commission, are going to compete later for the privatization of OSSH. The companies disqualified by the commission have the right to appeal the decision to the Minister of Economy, Genc Ruli. The decision of the Minister of Economy is final. “The announcement of the pre-qualified companies is going to be done on June 9. On June 16, we are going to send to them the official invitation to participate in the bidding process, and the draft sale contract”, Alibali said.
The World Bank and the International Monetary Fund have for years insisted on the privatization of OSSH. According to the criteria set by the Albanian government, the buyer should have long experience as a power supplier and a clean record as a company. For the last three years, the buyer should have sold more than Euro 1 billion in power. The qualified companies should provide evidence that no bankruptcy petition is filed against them, they are not in the process of liquidation, and they are not under investigation for corruption, fraud, or money laundering.
The government intends to sell 76 percent of OSSH. The rest of the shares are going to be divided between the workers, both those who are going to continue to work for OSSH and those who are going to be laid off during the privatization process.
The privatization of energy companies is considered as problematic since it creates a market dominated by few sellers, while the buyers, meaning the consumers, are many but unorganized.
Enel is the largest energy company in Italy and Europe’s second listed utility by installed capacity. It produces, distributes and sells electricity and gas across Europe, as well as North and Latin America to 50 million customers. Enel employs 75,500 workers in 21 countries. Enel has a generating capacity of 75,500 MW. In 2007, Enel posted revenues of Euro 43.7 billion, EBITDA of Euro 10 billion and net income of Euro 4 billion. The experts label Enel as the “old lover” because, for many years, it co-managed KESH with the Albanian government. Enel was responsible for the construction of several power plants and transmission lines financed by the Italian government. However, financing for these projects was frozen during the period 2002-2006 and the project remained on paper.
EVN, one of Austria’s largest companies, provides electricity, natural gas, heat, water, and related services. Outside its home borders, the company gained control of two Bulgarian electricity suppliers as that country privatized its electricity industry. The company has built drinking water and wastewater treatment plants in Croatia, Poland, and Russia EVN has also put its waste-incineration expertise to good use and has a waste-to-energy plant in Moscow. It also has power operations in Macedonia. In 2007, EVN posted revenues of Euro 2,223 million, EBITDA of Euro 350 million and a net income of Euro 227 million.
CEZ, a. s. is the largest electricity producer in the Czech Republic, founded in 1992 by the National Property Fund. CEZ Group was created in 2003, when CEZ, a. s. merged with several regional distribution companies. Today, CEZ Group is among ten of the largest energy companies in Europe, both in terms of installed capacity and number of customers. It occupies a leading position on the electricity market in Central Europe. CEZ Group has become a multinational enterprise comprising over 90 Czech and foreign companies. CEZ has a generating capacity of 14,388 MW. In 2007, CEZ posted revenues of Euro 7.1 billion, EBITDA of Euro 3.05 billion, and net income of Euro 1.74 billion.
Energie Steiermark AG is Austria’s fourth largest energy company. Its core business segments are electricity, natural gas, district heating and residual waste management, waste processing and recycling. Its majority shareholder is Land Steiermark with 75 percent less one share. Societ顤’Investissement en Autriche, an investment company of the French energy companies Electricit顤e France (EdF) and Gaz de France, holds 25 percent plus one share. Energie Steiermark employs 1,885 workers and sells 15,000 GWh of electricity, 1,500 million cubic meters of natural gas, and 2,600 GWh of district heating on domestic, as well as on foreign markets. Energie Steiermark posted in 2007 net revenues of Euro 1,174 billion.