Authorities in Serbia are seriously considering the ownership transformation of Elektroprivreda Srbije through the implementation of a public-private partnership with a foreign company, which would mean new credit borrowing of that company.
There is a strong lobby in the ranks of the government that advocates this process, and whether it will really happen depends exclusively on the President of Serbia, Aleksandar Vučić, Danas has learned from several sources close to the Electric Power Industry of Serbia.
These days, information has appeared in the media that the government in Serbia is considering turning EPS into a joint stock company, which would allegedly be the first step towards the privatization of that company. It is an old idea from 2003, when the Minister of Mining and Energy was Kori Udovicki. However, the idea was quickly abandoned, primarily due to fierce opposition from the union.
– That idea was never abandoned, but only “put in the drawer”. In the meantime, there was a systematic destruction of EPS by unprofessional management by party cadres. A powerful company worth seven billion euros at one point became a loser with huge debts. At the moment, that debt is at least around one billion euros. Given the unenviable situation, in which she brought the backbone of the Serbian economy to EPS with her guilt, the government came to the situation that it has to think about the privatization of the company. The essence is that this process will be carried out against the interests of the citizens, and there is a danger that a privatization model will be chosen that will push EPS into additional borrowing by taking new loans – our interlocutor states.
According to Danas sources, the Government of Serbia is considering three possible models of privatization, namely strategic partnership, recapitalization and public-private partnership. One of our interlocutors, close to EPS, claims that the third model has the best chance of getting the “green light” from the authorities.
– If someone wanted to manage the company through recapitalization or buy EPS through a strategic partnership, he would have to face a surplus of employees and a low price of electricity. Laying off employees and increasing the price of electricity, which would certainly occur, is not something that would suit the political interests of the government. Accordingly, most public-private partnerships are being considered in the field of building renewable energy sources. The problem is that this model is also harmful to the interests of the company, because it would push it into additional debts – our interlocutor states.
According to him, the plan is for a private foreign partner to offer EPS a project for the construction of a wind farm, hydroelectric power plant, solar plant or similar RES facility, but without providing its own funds for the realization of that work.
– Public-private partnership would be reduced to a private partner devising a business plan to improve the business of EPS through the construction of the most cost-effective type of RES. The problem is that this supposedly useful project would be financed only by EPS or the state by taking new loans. After the facility was built, it would be majority owned by EPS, while part of the capital would remain in the hands of the private partner who designed the project. It is clear from the above that such an investment would be against the interests of the state and EPS, because it would create additional costs, and the profit would be shared with a private partner who would not invest anything in the investment – explains our interlocutor.
Such a form of privatization would imply a complete orientation towards renewable energy sources and the elimination of electricity production from coal. The unions in EPS are explicitly against such an option, but also the privatization of companies. Therefore, as always, the most powerful man in Serbia, President Aleksandar Vučić, will have to give the last word on the eventual sale of EPS, who will decide whether that investment would be good for the interests of the government or not.
The president of the Mining and Energy Union in founding, Milan Djordjevic, former head of the EPS Workers’ Union, points out that the company is not officially talking about privatization or turning it into a joint stock company, but that “certain powerful lobbies are putting pressure on Elektroprivreda Privatized Serbia. ”
– It is not disputable that EPS grows into a joint stock company, but under the condition that it remains in state ownership. It is not disputable that it will continue to operate as a public company. Privatization in any form is disputable. Therefore, I have always been against distributing company shares for free. Those who would get those shares would sell them immediately and the co-owner of EPS would become a powerful foreign company, and that is privatization “on the back door”. Although nothing is officially said in the company, it is obvious that some political circles are lobbying for the privatization of EPS. Since the competent Ministry of Labor, Employment, Veterans’ Affairs and Social Affairs has been refusing to register our new Trade Union of Mining and Energy since March, despite the fact that we have submitted all the amendments we have requested, I begin to doubt that it is deliberately delayed prevented the union from opposing the privatization of EPS “, states our interlocutor, adding that would mean an increase in the price of electricity.
He adds that in case the lobbies that agitate for the privatization of EPS succeed in their intention, they will invite the citizens to join the employees in the protests against the sale of the company.
Answering Danas’ question, the Ministry of Energy assessed that the transformation of Elektroprivreda Srbije from a public company into a joint stock company owned by the state should have been done a long time ago, because there is no legal basis to be a public company for more than 10 years.
“It is a question of harmonizing the legal form of PE EPS with the law. In order for the change to take place, it is necessary to assess the value of the company, “the Ministry of Mining and Energy told Danas.
For example, according to the authorities in that ministry, everything was done the same with the company Elektromreža Srbije AD, which was with a slight delay, but in the end acted in accordance with the law and has been functioning as a joint stock company fully owned by the state.
– So the change of status from a public company to a joint stock company owned by the state is not a “step towards privatization”. EPS remains 100 percent state-owned. Our ministry and the Government of Serbia were not satisfied with the business of PE EPS, which has nothing to do with its legal form. The goal of the ministry and the government is to do a lot in the coming years on the development of this company, which is crucial for the country’s energy security – they point out in the Ministry of Mining and Energy.
Ranković: Minister Mihajlović is lobbying for the privatization of EPS
“Behind the idea of selling Elektroprivreda Srbije is Zorana Mihajlović, Minister of Mining and Energy, who is persistently advocating the shutdown of the mining sector in the company. She is lobbying for the privatization of EPS and the construction of RES. The construction of RES is not disputable, but the basic raw material for the production of electricity should remain the one that has the most and is the cheapest, and that is coal. Apparently, the powerful lobby prone to privatization has turned a blind eye to the electricity collection sector in Serbia, as well as to the hydro potential. For us, any privatization of EPS is unacceptable, because it is against the interests of employees and consumers. If the privatization lobby, including Minister Mihajlović, succeeds in its intentions, we will oppose it. The duty of the union is to keep jobs, and in privatization, employees would be fired, which is completely unacceptable for us, “Miodrag Ranković, president of the Union of the Kolubara Mining Basin, told Danas, Danas writes.
