Serbia-Croatia: Power plant electricity claim from CRO to SER, an obstacle for Serbian EU path?

25. July 2014. / News Serbia Energy

The President Josipovic stressed that Croatia would not make difficulties about Serbia joining to the EU, but still remained outstanding an issue of electricity supply from Serbian power plant in which construction Croatia has invested. The market value of this electricity is nearly a billion EUR, and this problem has waited to be solvedfor 23 years. Strengthening the local economy, why the inter-state relations are nurtured, is generally of secondary importance in Croatia, because politicians do not understand what they actually supposed to work.

President of the Republic Ivo Josipovic a few days ago said that Croatia would not be make problem to Serbia on its accession to the EU as Slovenia has done to Croatia. Josipovic said that Croatia would not blackmail Serbia and hamper its efforts but said that the resolution of outstanding issues would be important for the assessment of conditionscompliance because it was a “test for all of us”. Diplomatic, without detail, immaculate as holy water, as we have only a few bilateral problems. Serbia has fallen several timeson the test of good neighborly relations, roughlyinjuring feelings of many Croats to whomthe Fatherland Waris not ancient history, but an open wound. Many have reason to be disappointed by benevolence of Croatian politicians according to messages that often come across the border, and that do not respond adequately.

Now when Serbia is run by people who openly fanned the flames of aggression against Croatia, it should come to the spectacular progress. Is this possible? And why politics, it seems, believes that it should not take advantage of the delicate position of Serbia to solve many problems? Between the two countries there are many open questions, from searching for the missing and murdered soldiers and civilians and border on the Danube to the issue of companies’property in neighboring countries. No less important and seldom mentioned is that there is a huge debt of Serbian Electric Power Industry (EPS) to HEP for investments in manufacturing facilities on the territory of Serbia during communism. In the late seventies Croatian HEP invested about 120 MEUR of loansin the construction of TPP Nikola Tesla 6 and mine Tamnava, and it is estimated that the debt has grownin the meantime. In addition to the refund HEP has right on to preferential electricitypurchase from that power plant. Over 12 and half years21.9 TWh of electricityshould have to be suppliedfrom this power plant to Croatia, which is more than the total annual consumption of the entire state during the year. In the market, the price of this electricityquantity currently stands at 963 MEUR! Croatia and other former socialist republics were invested in the construction of HPP Djerdap, and during the conversation on succession also raised the question of that investment.

Wedid not getdetailed information about HEP’s contacts with the EPS. An engineer testified for “Slobodna Dalmacija” few years ago that Mravkov Management of HEP was not ready to solve the problem about electricity from Nikola Tesla despite the good will of EPS, while at the same time was imported electricity at exorbitant prices from Serbia. Croatia has a little more luck, or mind, about the return on investment in Bosnia and Herzegovina, which shows that the problem can be solved if there is political will. In this country, Croatia has invested in the construction of TPP Kakanj, TPP Tuzla and TPP Gacko. HEP has already taken 5.2 TWh of electricity at a cost of 34 EUR per MWhfrom TPP Kakanj and TPP Tuzla. The electricity from these plants ended in Mostar Aluminum Plant, which is on the exhale. With the electricitydelivery from TPP Gacko, in which HEP invested 200 MEUR, there is a problem because there are claims of Republika Srpska on HEP. In fact, HPP Dubrovnik supplieswith water from the reservoir Bileca near Trebinje. A contract was made when the plant was buildingand on that basisBiH was entitled to a large amount of electricity, which HEP did not seem to deliver by the projected rate. Both HEP and Republika Srpska now see its interest in the construction of HPP Dubrovnik 2, but interventions in the flow of the Trebisnjicaare considered as environmentally sensitive because they could have a bad impact on the Neretva.

Intensive negotiations on resolving mutual claims were conducted during 2012th; in the meantime, the activities seem to be extinct.

With an annual consumption of around 18 TWh of electricity and production that covers 60% to 70% of the needs,Croatia is a European champion in the import of electricity. But history has shown that the best is to build the energy security on its own territory and therefore it should continue with planned construction of power plants and learn from mistakes. In parallel, we need a more determined commitment of the Government and HEP about return on investment and electricityexports which belongsto HEP. These have been 23 difficult years in which this issue has not been resolved, and it is huge money. In general, there is absolutely no progressabout the succession with Serbia. Ministry of Foreign Affairs remains exclusively on political issues and the strengthening of good neighborly relations. Strengthening the local economy, why the inter-state relations are nurtured, is generally of secondary importance in Croatia, because politicians do not understand what they actually supposed to work.Croatia benevolently refrained from pressing the neighboring countries to sign a protocol on the stabilization and association, which should solve the new trade quotas. The local food industry in neighboring markets because of that still suffers major losses, while diplomats have fun verbal quips. We will not be against the Serbs as the Slovenians were to us, which is usually all right. Josipovichas right forone thing – future relations with Serbia will be a big test for both countries, a policy will have to prove that it exits to serve the people. In doing so, it should allowall to be turned into a friendly remission to own detrimentfor maintaining a polished image, which wecherishso carefully.

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