Montenegro: Power utility EPCG and TSO Co CGES offset debts at the expence of the 2016 budget

4. January 2016. / SEE Energy News

With the budget proposal for 2016, The Government opened up a possibillity to offset 8 million worth of debts between power utility Elektroprivreda Crne Gore EPCG and Montenegrin Transmission System CGES at the expence of the state budget, but also to use profit from these companies for new investments, which can be primarily related to the construction of the Second unit of the thermal power plant in Pljevlje.

The proposal of the Law on budget for the next year says that income based on ownership and profits gained by companies owned by the state in the energy sector in Montenegro in 2016 can be used to regulate debtor-creditor relations between those subjects and for new investments in the same companies.

According to earlier official data, mutual debts of these two energy companies are worth over eight million euro.

„Recent CGES audit report discovered that EPCG owes this company around 8.8 million for the use of transmission network, while the CGES owes EPCG 8.1 million for the engagement of system reserves in the first part of 2013, necessary for the operation of the Aluminum company from Podgorica KAP. According to the budget for 2016, the Government intends to offset the debts of these two companies at the expence of tax payers, which basically means that they will yet again take money from the state budget to cover debts made by KAP, while against any public interest, they already spent hundreds of millions of state money on KAP.“ MANS confirmed.

This organization claims that the Government with a general formulation in the Budget proposal envisions that income based on ownership and profits gained by energy companies owned by the state can be used for investments, without offering even the basic explanation of the model, conditions and amounts of the planned investments to Monetnegrin MPs.

MANS stressed many times that the project of the construction of the Second unit of TPP is very controversial and that its profitability is questionable. The total cost of the project, including not only the construction of the Second unit but also the environmental costs could exceed billion euro, when even the official records show that in the Pljevlje basin, coal reserves are not sufficient for the planned 40 years operation of the new thermal plant, even if they would use the so called unprofitable pits“ the announcement says.

MANS adds that EPCG and the Government never did the cost-benefit analysis which would show that the project of constructing the Second unit would really be of public interest and not of private interest or the interest of energy lobbies. “and they have been manipulating for a long time with the information that the construction of the new thermal power plant is necessary because of the deficit of electric power, even though that is not the case“.

They say that that any kind of state participation in the project of the construction of the Second unit of TPP in Pljevlje would mean covert and unauthorized state help, and that the international community unlike Montenegrin executive authorities plans to close down the so called dirty energy sources, that is the existing thermal power plants, in order to reduce the emission of pollutants, transmits

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