Serbia, Is EPS one step away from privatization?

, News Serbia Energy

Energy will be a key issue on the agenda of the new Government of Serbia, and the biggest challenge. Apart from the new ones, one old challenge remains: EPS. In the “secret” contract concluded by the Government with the Norwegian company “Rystad energy” on consulting services in the field of the energy sector, the potential privatization of EPS is mentioned. Is the state on the verge of handing EPS over to private hands?

“EPS is our gold” – boasted the government a few years ago, today – the state of the Electric Power Industry of Serbia is far from proud. About 94 million euros were given for the import of electricity only in August, a month in which Serbia previously exported electricity and made money from it.

And that is the information from the secret contract that the government concluded with the Norwegian company “Rystad energy”. The analysis of the situation that the Norwegians will do will not be cheap, and how expensive will the solutions be? Are EPS sales back in play?

The secret contract also mentions the potential entry of private capital into Elektroprivreda Srbije, and even a concession arrangement. At the end of July, the process of transforming EPS into a joint-stock company began, so the question is whether this has opened the way for private capital to enter this state-owned company?

From the Ministry of Energy, there was no answer to N1’s questions about the state’s plans for EPS. The sale does not necessarily have to be a bad move, says energy expert Željko Marković from Deloitte, but adds that in the global energy crisis, it is better for a company like EPS to be in the hands of the state.

“When EPS becomes a joint-stock company, not only privatization can be carried out, but also part of the recapitalization, so that the state still has a controlling or majority package of ownership.” All countries are essentially trying to maintain majority ownership or control package precisely for the sake of energy security and safety. Complete privatization – if it was not in our ownership at all – we would still expose ourselves to that problem – we would have the country’s energy security at risk”, says Marković.

The thesis on the potential privatization of EPS is only a part of the proposals put forward by the Norwegians… “Ristad Energy” has compiled a list of critical assets for which urgent procurement is proposed: 51 items worth around 50 million euros.

To which the Government said: It is possible.

But apart from the secret contracts that the Government makes, will the public finally find out another – for now well-kept secret – who is responsible for the destruction of the electric power system?

“It is a consequence of one of our political-economic systems that nurtures large state ownership in the economy in combination with party-led enterprises and then you have what happened in EPS.” If EPS experienced these losses and the losses it will experience in the coming period, and if EPS was a private company, it would have been out of the market a long time ago, it would have been in blockades for a long time, eventually in bankruptcy and liquidation. And the cost would be borne by the owners of that company, in this case the state is the owner of EPS and so are all of us as tax payers. In the end, we will bear that loss”, says Velimir Gavrilović, energy expert.

And who will be criminally responsible for that? Or better yet: will anyone ever? Perhaps we will learn about responsibility only when another “secret document” reaches the media, N1 writes.