Privatization Agency Reports Progress of Energy Deals in 2007

Privatization Agency Reports Progress of Energy Deals in 2007

Privatization Agency (PA) Executive Director Todor Nikolov reported the progress of energy sector deals handled by the PA in 2007 to the National Assembly Energy Committee on Wednesday, BTA reported.

The proceeds from the sale of energy companies account for over 80 per cent of the total of 255 million leva (around 130 million euro) agreed in payments last year, he said.

The Rousse District Heating Company (DHC) was sold for 149.8 million leva, the Plovdiv DHC for 62.8 million leva, the Varna DHC for 13.3 million leva, and the Sliven DHC for 10.2 million leva with 2.6 million in compensation instruments. The financial position of the Shoumen DHC is so bad that it is unlikely to attract investors' interest, Nikolov said. Meanwhile, the privatization of the Pernik DHU and the Bobov Dol thermal power plant, to the south of Sofia, will take place in 2008.

The privatization of the Bobov Dol power station was one of the most difficult contracts handled in 2007, before seven-month-long talks with Greece's Public Power Corporation (PPC) eventually broke down in May, Nikolov explained. The deal failed as the PA was not satisfed with PPC's offer of 70.9 million euro, as well as due to local coal miners' worries that PPC was not providing any guarantees that they would run the plan on locally mined coal.

The PA did not even turn to Italy's ENEL after the talks with PPC were terminated on May 8, and the procedure was abandoned on May 31, Nikolov explained, because of a "considerable difference in the amounts offered": ENEL was ready to pay not more than 100,500 euro for the power station.

PPC appealed the breakdown of the talks before the Sofia Administrative Court, which rejected the appeals on December 5. The Supreme Administrative Court is expected to render final judgment on the actions brought by the Greek company, Nikolov said.

Meanwhile, a new privatization procedure has beeen initiated for Bobov Dol, with a starting bid set at 100 million leva.

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