Albanians face consequences for not paying energy bills

24/11/2008

Albanians who fall behind on their energy bills might lose heat this winter.

By Manjola Hala for Southeast European Times in Tirana – 24/11/08

Those who do not pay their bills will lose their electricity. [Getty Images]

Albanians are used to irregular supplies and sometimes outright shortages of energy. But this winter, as their electricity distributor undergoes imminent privatisation, Albanians will experience for the first time a new kind of energy shortage: cutoffs of electricity to customers who haven't paid their power bills.

Albanian national TV has been broadcasting public service announcements warning electricity users to pay their bills. Otherwise, the ads warn, their electricity "will be missing".

The change comes as a Czech company, CEZ, wraps up negotiations with the trade and energy ministry on purchasing 76% of OSSH, Albania's state-owned distributor of electricity.

CEZ, with a bid of 102m euros, won the privatisation tender in early October. The process should be complete by the end of this year.

According to tender conditions, CEZ will pay off the distribution operator's debts and will invest 200m euros in the next five years. In return, Tirana will criminalise the theft of electricity, previously a low law-enforcement priority.

Meanwhile, the new urgency of paying one's bills is sinking in among the public. Households paid 82% of what they owed in October, while businesses paid 92%, according to OSSH. The leading deadbeats are state institutions.

Albania's energy sector is divided among three state companies – KESH, which handles generation; OST, which runs the transmission lines; and the newly privatised OSSH.

The state-controlled energy sector is able to supply 68% of the country's electricity, according to KESH. Swiss-, Czech- and Serbian-owned firms supply the rest.

Albania has been pursuing privatisation of its energy sector in hopes of attracting more investment, improving sector management and thus solving the sector's frequent financial problems. International institutions present in the country strongly encourage this strategy; for example, the International Finance Corporation assisted the OSSH tender.

Privatisation of OSSH, observers expect, will precede a chain of coming privatisations.

OSSH is the second big state-owned company to undergo privatisation, following the former oil monopoly, ARMO.