Power market liberalization in Serbia fast forward halted, State pursues social politics within electricity price

15. March 2013. / News Serbia Energy

While EPS is asking Government to approve 300 million EUR worth indebtedness in order not to go bankrupt, state, as its boss, requires from EPS to forgive bills of most endangered customers.

Electricity price won’t be changed before 1 April when social cards suppose to become popular- Zorana Mihajlovic, Minister of Energy, stated. She added that free kilowatt-hours for poorest citizens will be paid by Elektroprivreda Srbije until the budget rebalance.

On the other side, the first man of EPS, Aleksandar Obradovic, urges Government to approve credit of 300 million EUR for EPS in order not to go bankrupt. The same company writes off interest to the biggest electricity owners in amount of 80 billion dinars at the same time.

Considering all these facts, the question arises- How will EPS pay for electricity to the most endangered customers if it faces bankruptcy that can be expected until the end of March if Government doesn’t approve 300 million EUR of new indebtedness?

Does state push EPS in even worse situation in order to collect political points or it only seems that way? Maybe the motivation has some higher interest that we can even think of.

Maybe, we only used to pursue such politics toward public companies. Somebody will take care of that in the future. Who? We shall see. That is the future. We suppose to survive the present time.

Danijel Cvijecanin, an economist, explains that state with this policy only confirms that it doesn’t want to change anything. It only continues to pursue social politics within EPS. So, it can’t say no.

-EPS hasn’t constructed a new object in the last 25 years. It doesn’t have any losses, so it offers cheap hours to citizens. Every government does that. Every government talks about necessity of new investments in the energy sector, but no object has been constructed yet- he says.

Nobody actually think about strategy for energy development, they do it declaratively- Cvijecanin stressed. If they really think about it, kilowatt-hour would be more expensive, but it is not popular among citizens. This is the way for collecting political points within social politics i.e. the cheapest electricity in Europe

He says that he doesn’t understand why nobody ever asks what will happen if industry in Serbia start working like it was at the end of 70s. If industry withdraws this amount of electricity again, Serbia will be in the dark 6 hours daily.

-The electricity overage during night occurs because industry doesn’t work. EPS sells these overages and so state continues to pursue social politics- he explains.

When he was asked to explain the logic of that, Cvijecanin said that it is the characteristic of the countries that sold everything what worth- bank sector, trade chains, pharmaceutical industry and telecommunications and so became the colony.

Goran Nikolic, the economist, says that state actually helps EPS because it tries to release it from part of social politics that was pursued within it for years, but in a postponed way, until the budget rebalance.

It is a great success that state promises to cover electricity expenses for the poorest customers instead of EPS, because state is the one that should be in charge of society problems, not public company- Nikolic says.

On the other side, 80 billion dinars of interests’ write-off is the last spasm of EPS in order to try to charge anything because it can’t just turn off electricity, what is also the measure of social politics.

-If we don’t write interests off, EPS will not manage to charge anything what means that it would lost 37 announced of 70 billion dinars they would have to charge if everyone pays for everything.

Nikolic says that electricity price must increase and if he wants to keep EPS, he must begin with new tariff system that predicts night electricity to be three instead of four times cheaper. This step is not disputable, but people that learned to heat on the most noble gas and at the cheapest price must get use to these changes.

Ordinary calculation is the most convincing one, but the transitional period is required in socially responsible country this government wants to live in. We give people a chance to buy stoves on wood and coal, and to install gas.

Despite everything, we think that there will always be people that would find it easier to turn the switch on stove no matter how much it costs. Since they won’t pay for bills ordinarily, state will write of interests like they do currently, and they will write off principal debt afterwards.

It is not popular and politically profitable to turn electricity off to big consumers. This is not social but mockery of economy politics, but the choice is only ours.

Source Politika/Serbia Energy/Agencies

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