Serbia: Damage of 500 MEUR increases the electricity price and changes Power utility EPS management

8. August 2014. / News Serbia Energy

Experts remind that the price increase is necessary because the floods, which caused damage to EPS which it cannot repair from nowhere. While it does not solve the problem of 18 percent technical losses of electricity, of which one part is stolen energy, and 15 percent of the unpaid bills, the Government of Serbia will not approve the increase in electricity prices, promised a few days ago Prime Minister Aleksandar Vucic, saying to EPS directors but in his usual manner, not to even think to come to his government and seek price rises until these problems are not resolved.

Experts remind that the price increase is necessary because the floods, which caused damage to EPS which it cannot repair from nowhere.

“Procedure, by which the Electric Power Industry of Serbia should first improve its operations, reduce costs and increase the collection, had a sense entirely up to the catastrophic floods which occurred in Serbia. After the disaster, it is absolutely impossible to reason in this way. Actually, we could think so only in the case that someone offers 500 MEUR to EPS for the restoration of damage caused by flooding. Easily at some moment the electricity must be increased in order EPS tocome to the money needed to repair the damage and the correction in electricity prices never can be ​​conditional by the businessrationalization and improvement. Those two things should be implemented in parallel.

On the other hand energy experts, fully supports the position of Prime Minister Aleksandar Vucic that EPS should not seek an increase in electricity before the rationalization is done.

What Vucic seeks from EPS is completely realistic. Management of the company who led it at an inadequate and substandard manneris fault for the current situation. Consequently management has no right to justice itself with flooding; especially it has no right to entitle them as a reason for increase in the electricity price. The truth is that “Tamnava – West Field” is still flooded, but other open pit mines are not flooded so that current can be produced. The enterprise management is obliged to reduce the cost and increase the electricity charge. Poor director performance at EPS is underscored by the fact that the collection rate is less than it should be.

Economists believes that EPS must be guided by the firm hand to ensure better collection and eliminate the “technical” losses mentioned by Vucic and that only with the clinics may be made the arrangements for the rescheduling of electricity payments “because you can turn off the electricity to some hospital “, but to all other institutions and other consumers should be turned off the flow of energy, if you do not pay.

Asked about the allegations of EPS Director that the problem is that according the lawhe cannot fire any director of the distribution companies, because he is not formally their chief, medias says that the Government must do it then, or to change the rules so that the EPS director be superior to everyone in the system, “and if he finds that the Government blocks him, then he himselfshould go, because why at all is hein that position”.

Commenting on other saving measures that the government plans, or release of more than 60,000 people from the public sector, which is about eight percent of the people who the government pay and cuts in wages and pensions by 10 percent, economists experts says that such measures could lead to economic growth, if the people dismissals would be carried out precisely so that dismissed would be those who are surplus in the public sector, not the workers in productive enterprises.

When an analysis of where there is a surplus is done, then it can be accessed by rational employees downsizing. Prerequisite for it is the professionalization of the management companies because it is not that hard to imagine rationalization.

Download as PDF :

Download PDF