The complete separation of the distribution from the Electric Power Industry of Serbia, ie the formation of an independent operator of the electricity supply system, is a possible aspiration of the authorities to privatize the company EPS Elektrodistribucija on a “small door”, according to the expert public.
Although the President of Serbia, Aleksandar Vucic, has stated on several occasions that there will be no privatization of EPS, what remains unclear is whether he means all parts of the Electric Power Industry of Serbia when he says that.
The Minister of Mining and Energy, Zorana Mihajlovic, recently stated that the Government of Serbia adopted a conclusion which enabled reforms in the Electric Power Industry of Serbia and created conditions for the beginning of the work of an independent distribution system operator.
She said that the transfer of assets and the transfer of employees for the maintenance of the distribution system from PE EPS to EPS Distribution, create the conditions for Serbia to get a completely independent distribution system operator.
“Apart from harmonizing EPS Distribution with the Law on Energy and obtaining a license from the Energy Agency for the activity it performs, this process is also important due to better control of costs and reduction of losses on the distribution network,” said Mihajlovic.
The adopted plan, in addition to the transfer of assets and transfer of employees from the Technical Center of PE EPS to the distribution system operator (ODS), includes the transfer of shares in EPS Distribution from PE EPS to the state, issuing licenses and harmonization of EPS Distribution acts.
What surprised the public is that Minister Mihajlovic presents the reforms in EPS as if it were a process that is just beginning, even though the separation of activities in that company was done in 2015.
At this moment, in addition to the Electric Power Industry of Serbia, there is also EPS Snabdevanje, which operates as a branch, and EPS Distribucija as a distribution system operator as a separate legal entity owned by PE EPS.
The only novelty in relation to the story that was current at the time of the separation of EPS’s activities five years ago, is now that the ownership of EPS Distribution from PE EPS should be transferred to the state.
On that occasion, Marinika Tepic, vice president of the Party of Freedom and Justice, also announced that the separation of the activities of the Electric Power Industry of Serbia cannot be the basis for the reform of that company, as Minister Mihajlovic stated, because that reorganization has already been done.
She reminded that EPS separated its activities five years ago in accordance with the valid Law on Energy, and also in accordance with the Third Energy Package of the European Union.
Tepic also assessed that the separation of distribution activities does not mean that EPS cannot be the owner of the same distribution, which would be in accordance with the valid regulations of the European Union, as well as in accordance with the valid Law on Energy.
Privatization advisor Branko Pavlović believes that the state is obliged to explain to the public why it completely separates EPS Distribucija from Electric Power Industry of Serbia.
– Separation of electricity distribution activities from EPS can be the first step towards the privatization of that part of the company. President Vucic, on the other hand, said that there would be no privatization of EPS. Therefore, the authorities are obliged to say if there will be no privatization of EPS, whether that means that none of its parts will be privatized or some will be developed and sold as distribution – our interlocutor states.
In his opinion, at the moment when the government undertook the obligation towards the International Monetary Fund to reform the EPS, it could be sensed that it was a kind of preparation for privatization in certain segments.
– The division of EPS is justified by its poor business and the need for reorganization in order to stop such practice. That EPS’s business needs to be made more efficient is an indisputable fact, but at the same time that does not mean that its profitable parts, such as distribution, should be privatized. Such a thing is definitely not in the interest of that company – Pavlovic thinks.
Energy expert Goran Radosavljevic also believes that the question for the state is whether parts of EPS such as EPS Distribucija will be privatized.
– Only the authorities can answer the question whether the sale of EPS Distribution will take place or not. It is not uncommon in Europe for a distribution system operator to operate so that it is not owned by an electricity company. What is a fact is that in some other countries, such as Macedonia, the separation of electricity distribution was a step that preceded privatization. So, hypothetically speaking, the aspiration for the privatization of the electricity distribution part also exists in this case, and whether that is really the case is a question for the authorities – our interlocutor concludes, Danas reports.
