Serbia: Gas market & unbundling, Srbijagas as Holding (un)acceptable solution

20. October 2014. / News Serbia Energy

The plan for restructuring the Public enterprise Srbijagas which the Ministry of Mines and Energy sent to the Government of Serbia, if approved, would be acceptable to the European Union, and at the same time it will not be good for the interests of citizens of Serbia.

The situation is very simple in this regard. Serbia is not a member of the EU and does not have to do anything what Brussels ask if it does not want. However, our country is in the process of joining the EU and therefore is required to comply with all the rules that are applied in the EU. One of these rules is the antitrust business. In the field of energy that means that the EU requires that the activities of transport and production are separated, so that the manufacturer of “blue fuel” cannot be its vendor at the same time. That is why the EU insists that the monopoly that exists today in Serbia to be abolished. Serbia wants to join Europe, and it is obliged to accept what the EU, more precisely, the Energy Community asks from us .

The proposal made by the Ministry of Mining and Energy was sent to the Government of Serbia and backed by Srbijagas management, which provides the division of energy activities in the company, but not through the creation of new ones, but organization of already existing as a holding company.

This is unacceptable, because in this way it would not be abolished monopoly that exists today in the gas sector in Serbia. The greatest damage of non- abolishment monopoly would have precisely the consumers. The Serbian Government may hinder the adoption of a decision on this issue, but given its European orientation, it will have just to respect what Brussels says. We should wait and see what the government will conclude after the ministers are discussing it – says Savic and concludes that the only way to restructure Srbijagas similar model according to which separate the activity in the energy industry.

Other expert opinions are that the holding is the best system of organization for Srbijagas.

It is best for the interests of Serbia, but also for Srbijagas business. It is necessary that the company continues to operate as a vertically integrated and in one place to be gathered the waist and money. This way organized system gives you the best business results.  Thus organized is Gazprom, one of the most powerful companies in Europe. If Gazprom is organized as a holding company and it is successful, I see no reason that Serbia would not be organized in the same way. It would be acceptable for the EU and I am sure that they will accept any decision that we make. In making decision the Government of Serbia should primarily look at the interests of Serbia .

EPS Model

Now we have a company to produce electricity Electric Power Industry of Serbia, we have EPS Supply as a separate company; we have Elektromreza Srbije responsible for transmission. What offers the Ministry of Mining and Energy, and which is essentially a management proposal of Srbijagas headed by Dusan Bajatovic, only is a formal separation of activities because it would continue to operate under the holding company, which means that it would continue to be managed from a single center of power .

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