Montenegro: A2A might overtake full ownership of the energy company EPCG

3. June 2013. / SEE Energy News

State is the owner of 55% of Montenegro energy company EPCG and Italian A2A, as minority shareholder already manages EPCG with almost 44%.

Sale of mayor state ownership of EPCG is not placed in current privatization plans of the government. Government appreciates and carefully reconsider all suggestions and advices from international financial institutions.

-Government answered the question if they had talked about possibility of total privatization with representatives of World Bank (SB) which suggests them to believe that this is the way to eliminate bureaucratic inefficiency and political involving in EPCG’s business what disables its growth- as he estimated.

The suggestion of SB is that Government should give up mayor ownership in EPCG.

“Vijesti” asked if Government lead by Milo Djukanovic will work in direction of SB suggestions, considering that parliament conclusion since 29 February last year need to be respected and that EPCG need to remain in mayor ownership of the state. New conclusions for Aluminum Combine where public interest is protected in strategically important company- Elektroprivreda, it is stressed that they represent a unit with previously adopted conclusions.

State is owner of 55% of electricity company and Italian A2A manages EPCG with almost 44%.

“We should have in mind that minor stockholder Italian Company A2A determines managing structure in EPCG in the context of this concrete suggestion today and this makes foreign partner have significant influence on market behavior and business opportunity of the company”, it was answered officially from Government’s bureau for public relations.

It was concluded from World Bank that complete privatization of EPCG would contribute to increase of company’s efficiency. They state that maybe “radical structural change- complete privatization where Government gives up mayor ownership in EPCG” is required for long term solution to the problem of bureaucratic inefficiency. political involve and numb growth of electricity offer in Montenegro.

Government recapitalized EPCG in 2009 and it is in duty of foreign management. According to A2A contract, mayor ownership remains to the state and this partner can sell its part to the third side only with government’s approval.

Government considers obligating that state is the mayor owner

That conclusion of parliament for EPCG to remain in mayor ownership of the state is obligating conclusion to the government. State policy goes in this direction and only such policy is acceptable for Social Democracy Party. SDP’s spokesman, Damir Sehovic estimated that with regard to suggestions from World Bank.

“State control over national resources, especially energy, is condition to SDP for economy, policy and social stability of a little country like Montenegro. Therefore, we have pointed significance of saving mayor state ownership in EPCG. Majority decided in parliament- state keeps mayor ownership in EPCG”, Sehovic warned.

Opposition parties are also for keeping mayor national package in EPCG. SNP suggested a law for saving national interests in EPCG which got required majority because it is stated from smaller government member SDP was stated that it is already protected with parliament conclusions.

Sehovic stressed that foreign management exists in EPCG for three and a half years so the risk mentioned by SB with experiences of several countries that “fluctuating political involve” can have deep and harmful consequences to success of electricity and other infrastructure sectors.

Foreign manager is not problem for SDP because it the contract for cooperation is used, partner can improve work of energy company by knowledge and experience or businesses from some other country”, Sehovic messaged.

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