The government shall not beg state utilities companies for its decisions to be implemented says Energy Minister Mihajlovic

5. March 2013. / Uncategorized

We have inherited Electric Power Industry of Serbia that holds up Serbian economy. This situation is the result of poor management for ten years back, and the result is difficult financial situation, devastated system, roguery, irrational funds spending, enormous debts, and at the same time a lot of claims, trend of loss making in the distribution system. On the proposal of our Ministry, this government immediately undertook measures for solving problems in EPS.

Our task is to make the conditions that will initiate changes, and that was exactly what we have done, as we have made a Decision on instituting the corporatization process several months ago, i.e. instituting reforms inside EPS, we have written off interests on debts and ordered EPS to make a Debt Restructure, defined the list of Priority Projects in Energy sector in order to start creating new values. Management bodies in EPS or any other public company are there to implement decisions made by the government that protects the interest of its property. What I, as the Minister, will never let is to beg for the Government decisions to be implemented or to let the implementation be in delay. This was the case in EPS in the past months. Things cannot be handled this way anymore. I believe that all have learned some lessons and that the problems are not to be solved in the media, but at the table and as team work – says Mrs. Zorana Mihajlović, Minister of energy, development and environmental protection, in the interview given to Danas newspapers.

The Management of Electric Power Industry of Serbia has asked from the Management Board to approve the loan. How do you feel about the request of the management and the fact that this matter has not yet been discussed at the meeting of the Management Board of EPS.

-EPS has held a meeting of Management Board, the important decisions have been made and now the changes will happen much faster. Whether EPS will get into debt and how much, is to be seen after the analyses that are to be made. Being the Minister for the relevant department before the government,  I am to be persuaded that EPS has a clear plan and that it has exhausted all internal options.

There were some speculations that behind avoiding setting up a meeting of Management Board of EPS, at which the loan would be discussed, actually lies a political conflict in the government on the SNS-SPS relation. Is that true?

– If you make things look that way, then it would mean that G17 plus party i.e. URS is behind the affair and political assault on the government about the aflatoxin in milk, since Ivana Dulić is the envoy of the shutdown of Serbian agriculture, i.e. stopping the buyout of milk from Serbian farmers, and import of cheap animal feed that is GMO. Mrs Dulić has written the program of G17 plus, so regardless of the fact she is not the member of URS, one may say the whole story about on aflatoxin is a backstage conflict of coalition partner, which apparently is not the case. I would not argue that in these cases exist any conflict among coalition partners, but I would say that there are responsible and irresponsible individuals, and also interest groups standing behind the standstill, slowing down and problems in energy sector as well as in any other areas.

When and how much will electricity be made more expensive in Serbia?

– This government and I as the Minister have suffered a lot in recent months because of the announcement of the electricity prices increase. I clearly said that there would be no price increases in energy without prepared social maps. Although social maps were prepared in February and I announced the price increase, it could not be implemented because EPS has not implemented the government decision and has not formed a company for public supply that could seek price increase, and not from the Government and the Minister, because under the new law I am not in charge any more, but from the independent regulatory body, the Energy Agency. Delays will not happen because the government and the Ministry will use all legal options to implement the decision. But what is more important and on which I insist, is that the government will not provide income to EPS through price increases, but through a clear business policy and development and investment.

The proposal of new tariff system envisages for the night, low tariff in the red zone be three times cheaper than the day tariff, instead of once four times cheaper. It would certainly increase bills for the population that does not have other choice but to use electricity for heating. Simultaneously, the Regulation on energy protected buyers has been adopted. What does this regulation represent and will it refer to this population category as well?

– Tariff system is to be clear, descriptive and to provide the option not to use the electricity or to use it less for the heating. This is the objective of the new tariff system.  I have to point out that methodology of setting the price, as well as tariff systems are established by the Energy Agency, and not the Minister. As we are a society in transition phase, I am as the minister very much interested in protecting the economy and citizens’ interests. That is precisely why, after the conversation made with Energy Agency, the tariff system Proposal was withdrawn from the procedure in order to be redone. The plan is that the ones who use electricity for heating pay much higher price than the underprivileged people or the ones who are energy efficient. At the same time, alternatives have to exist, above all through the use of other energy products and energy efficiency. For that reason, the Ministry has forwarded the Law on energy efficiency to the Parliament of the Republic of Serbia. The Price policy and price parities are the most serious part of the energy policy and they cannot be solved separately.

Are you satisfied with the work of Srbijagas?  Even though it is a loss-making company, this company has” under its roof “ several companies under restructuring. In your opinion, should this stay the way it is or Srbijagas should absolve itself of this responsibility?

– I do not believe that a minister can be satisfied with any public company work which is loss-making and which is in debt with over one billion euros. Therefore, we have prepared a restructuring plan of PE Srbijagas, which will soon be adopted by the Serbian government. In addition to solving the problem of non-core businesses that have little to do with core activities of Srbijagas, we will pursue the review of financial policy. I’m sure PE Srbijagas can be a more successful company and that, no matter how it may sound, the price of gas is not a decisive factor in its success.

How do you assess the work of the Ministry you are leading in the previous period?

– I am not of those people who are satisfied with what is accomplished, and I always ask more form my associates, sometimes more than maximum. Therefore, I do not deal with assessments, because I believe citizens, economy, technical associations, civil society, our and international institutions should deal with assessment of our work. I am wondering every day how much we have moved things forward and how much I can contribute for Serbia not only to have energy and energy products, but to be respected, opened for investors, for the citizens to have trust in the institutions and for the energy to be our pride, and not our defeat.

Source Danas daily newspapers/Serbia Energy

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