change font size

print version

copyright

Other languages:

Low Revenues Hamstring Kosovo Energy

RTK, Prishtina

15 02 2006  Officials vow to balance public utility's budget by reforming bill collection and penalities, but consumers remain pessimistic.

On February 15th, BIRN held a debate on electrical power in Kosovo, one of the most pressing issues facing Kosvar citizens.

Present at the debate were: Joachim Rucker, Chief of the IV Pillar of UNMIK; Ethem Çeku, Kosovo Minister of Energy and Mining; John Ashley, Managing Director of the Kosovo Energy Corporation (KEK); Sean McGoldrick, Commercial Executive Director of KEK; Agron Dida, Deputy Minister of Energy and Mining; Gazmend Begolli, consultant for the Ministry of Energy and Mining; and Lazer Krasniqi, head of the KEK Workers Union.

The discussion focused on the different issues that affect an essential, basic commodity – electricity – with emphasis on the problems KEK is facing and how those problems might be solved.

For Energy and Mining Minister Çeku, future electricity production in Kosovo will depend on improving bill collection. He said the expected completion of an internal billing system would insure an adequate cash flow for KEK in the future and cover the huge investments needed to be made in the company's distribution network.

KEK Managing Director Mr. Ashely said Kosovo's electrical system suffers from numerous problems 'because of the huge under-investment in the transmission and distribution network. We have technical problems that could be resolved only by investment'.

For Ashley, the final answer to low revenues is bill collection. Collecting bills more efficiently would help fund the importation of electricity and spur investment in the network.

However, the head of the KEK workers' union, Mr. Krasniqi, was not convinced this strategy would solve the company's problems. For him, only if KEK enjoys 100 percent bill collection could Kosovo be said to solve its electricity problem, and total bill collection won't happen.

The discussion included the controversial ABC plan. The plan groups KEK customers into A, B and C categories according to how their neighborhoods and towns pay electricity bills. A and B groups pay more and are rewarded with as much as 24 hours of electricity, while those who pay the least, C group, receive power for only a few hours a day.

Through reports produced in the field, many citizens asked why they should be collectively punished. Many people in neighborhoods placed in C groups pay their electricity bills on time, they said.

Deputy Minister of Energy and Mining Agron Dida agreed this system is not the way to resolve the problem. KEK should take disconnection measures for individuals who don't pay, he said.

In response to this issue, KEK Commercials Executive Director Sean Sean McGoldrick said there are 70 teams in the field disconnecting non-paying consumers. But those customers often reconnect again illegally, he said.

'The ABC plan is not designed to punish those who don't pay, it is designed to reward those consumers who pay their electricity regularly' said McGoldrick.

Mr. Joachim Rucker, Chief of the Economic Reconstruction, IV Pillar of UNMIK, remains confident that the ministry, KEK and other actors in the energy sector are doing their job. He said a good team (the Task Force) is in place and is working towards the creation of effective legislation that will make electricity theft a crime and resolve these problems.

For Begolli, a consultant to the energy ministry, not everything has been done to make the system work, at least not with the approach this issue requires. 'There have been plans to fix the power plants that usually take much more than they should take, for no reason, and KEK management should be responsible for that', he said.

According to Krasniqi, KEK management has failed to create a better system to keep consumers responsible for their debt, as KEK loses court cases all the time due to a lack of evidence. Just two months ago, a request was made not to proceed with cases in court because of the losses KEK was expected to sustain.

'KEK should focus on losses', Krasniqi said. 'If we look at the balance for year 2005, KEK was producing more energy than it planned to produce, but still there were restrictions'.

Ashley defended KEK by saying that about four hundred cases go to the courts every year regarding illegal connections to electricity.

'There should be a special court that would deal with such cases, as it is impossible for a regular court to handle such a large number of technical cases' said Ashley.

Deputy Minister Dida explained the situation by saying that 'if we look at the balance of December 2005, KEK has produced up to 22 million Euros of energy, and billed only 10 million euros. However, out of 22 million euros spent, only 7 million euros have been collected from the consumers'.

Çeku pointed out that the ministry is not satisfied with KEK's management or the work it has been done so far. In the answering the question 'What specifically you are not satisfied with?' he said 'The billing issue. We are experiencing a downfall in billing if we compare this year to the year 2004'.

Another issue has been raised with regard to legislation overseeing procurement procedures. Both the management of KEK and the ministry say this legislation is blocking their plans.

Rucker pointed out that sometimes 'it is not the management who should be blamed but it is the procurement law that is not applicable for publicly owned enterprises'.

Dida did not agree that the public should blame only the procurement law. 'I was very much engaged with power plant A3 and we are aware the procurement legislation has its long procedures. But in this particular case, the tender to fix the plant was only announced months after it needed to come out. It was not done with the urgency that this matter required but with a very laid-back attitude of KEK management'.

Debate participants also tackled the problem of coal resources. There are sufficient coal reserves, but as McGoldrick explained, there has been no mine planning for many years, mines have been developed in an inappropriate manner, and UNMIK did not allow KEK management access to the Hade area until November 2005.

2006 will be a year of transition for KEK, however. A number of new Kosovar directors will be hired to fill KEK positions internationals are now holding. At the end of 2006, the ESBI will be gone and a new phase will begin, said Mr. Rucker.

The main message to the audience throughout the debate was that 'People have to pay for electricity and not expect it as a human right'. But this demand is the problem.

A short piece of field reportage was shown during the debate. In it, Kosovars expressed their concern about the current situation with their power supply. Most of them were frustrated. Even if they pay their electricity bills, they said, no one can assure that they will have power.