Montenegro: Prosecution investigates power utility EPCG cash extraction thru consultancy contracts with Italian companies

Published on 25. May 2015., SEE Energy News

Prosecution examines cash extraction from power utility EPCG. EPCG paid more than 15 MEUR for tips without calling public tenders since 2010^th

The Supreme Public Prosecutor Ivica Stankovic informed the Committee on Anti-Corruption that the provided materials about multimillion contracts for EPCG consulting services were forwarded to the Special Prosecutor. Stankovic said that subject related to the same topic was formed on charges of the Party of United Pensioners.

Association of EPCG Small Shareholders also earlier warned of disputed contracts under which the company paid over 15 MEUR since 2010^th for consulting and services without conducted public procurement. They suspect it is money drawing for fictitious services. “The Department has taken certain investigative actions within its competence after which it will decide on the further course of the proceedings”, it was stated in VDT response to the Committee.

Committee chairman Predrag Bulatovic said yesterday that they have not received yet a reply of the Public Procurement, although its director Mersad Mujevic “wondered” on the control hearing, arguing that he did not know anything on these activities. According to the Law on Public Procurement, the companies in which the state is the majority owner are obliged to open tenders for goods and services procurement. The state has 55 to 57 percent of the shares in EPCG in recent years. Italian A2A, which manages company since semi privatization in 2009^th, has 43 to 41 percent.

At least 7.5 MEUR has since been spent on consulting services from the associated company A2A from Brescia and two MEUR on the company BEIN from Milan.

For three months a slight fall in Electric Power Industry profit to 13.4 MEUR

Majority stat e owned Electric Power Industry made a profit of 13.4 MEUR from January to March this year, which is about 400,000 fewer than in the same period last year.

According to a report from the site of Montenegroberza, EPCG had total revenue of 65.7 MEUR, which is about 200.000 less.

Operating expenses decreased by 2.7 MEUR, to 51.8 MEUR. EPCG profit would be better if there was a loss of two million on the basis of “results from other activities”. In the same period last year it was realized a profit of 1.5 MEUR from “other activities”.

Accumulated losses decreased by 13MEUR, to 222 MEUR. EPCG plans to reduce this total loss at the expense of the company’ capital at the next General Assembly of Shareholders.