Serbia: Changes in power utility EPS, risks ahead

7. May 2015. / News Serbia Energy

The State needs to say what it wants from its most valuable company.

No one contests the right of the state to run social policy, but it cannot do it over power utility EPS and low electricity price, but the way it has been done all over the world – through budget.

For the first time, since this country, whatever its name was in the past, has an agreement with IMF in which one of the important clause for its implementation is  – restructuring of public companies. It is not a coincidence that the first one of them to be restructured is “Electric Power Industry of Serbia.

“Electric Power Industry of Serbia” EPS is our largest and most valuable company. EPS is not merely a producer of electricity, the product without which the entire country would come to a standstill, but the company that by its production and maintenance of its generation, transmission and distribution capacities employs a huge number of ancillary businesses and workers.

EPS has always been an exemplary system. Once, not so long ago socialist time, this company was considered a company that in many ways was similar to the French electricity sector. The disintegration of SFR of Yugoslavia, the years of sanctions and then the brutal NATO bombing, which is frequently overlooked, returned our electric power industry decades back. Instead of development, it was necessary to raise and repair what was destroyed. Now we are back to square one. The question is how to make this economic lifeline produce electricity, develop, raise technical and technological performance, and not make losses. The state has to say what it wants from its most valuable company. The fact that we entered the public companies restructuring, including EPS, into one of the obligations with the IMF , can only be a sign of the seriousness with which we have to approach this job.

Nothing can happen overnight, not even the improvement of EPS.

The problems have been kept aside for many years, so it is not possible the get out of them straight away. It is a good thing that the government has, so to speak, given more power to the director to run the company and that everyone is responsible for their part of the job, and the chief manager and his team to render accounts to the owner. EPS managers are experienced enough and that they have already prepared the sequence of moves – from reducing costs to the optimal extent, through the human resources and employment policy to price policies and development. So, the goal is to make a true cross-section of the situation, and the manager will tell you where the most vulnerable points in the system are.

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