Dispute between Macedonian government and EVN worsens

21/01/2009

Macedonian Prime Minister Nikola Gruevski has expressed disappointment with the performance of the Austrian firm that runs his country's electricity monopoly. Regulators might yank its operating licence.

By Goran Trajkov for Southeast European Times in Skopje – 21/01/09

EVN runs Macedonia's electricity sector. [Tomislav Georgiev]

The gap between the Macedonian government and EVN -- the main hub for distribution of electricity in Macedonia -- is widening. Prime Minister Nikola Gruevski has accused the Austrian firm, which bought the Balkan country's national electricity monopoly in 2006, of providing poor service to customers.

"EVN Macedonia is the most problematic foreign investor we have," Gruevski said in early January. The firm is setting a "very bad example" for other foreign investors, he added.

Macedonian households have been suffering frequent cutoffs of electricity. Service took an especially dramatic turn for the worse after October 1st 2008, with increasingly common outages lasting anywhere from a few hours to a day or two. The last straw for many Macedonians was widespread blackouts over the New Year's holidays.

EVN is either intentionally denying service or failing to invest enough in the power grid, Gruevski said. He also faulted the monopoly for failing to connect sports arenas -- a construction priority for the government -- to electrical service.

"We have been unable to open arenas in Brvenica and Demir Hisar for six months now because EVN refuses to connect them. ... [Denial of service to completed stadiums] is not so tragic, but what is truly tragic is that the [builders of] many private enterprises, factories and other projects under construction have been begging for months to be connected," Gruevski said.

EVN defends its record. The chairman of its Macedonian managing board, George Waldner, says the company is a good corporate citizen in Macedonia, one of the few international corporations willing to invest during a global economic crisis. In his company's defence, he said it had spent 85m euros on improving the country's distribution network.

Company spokeswoman Lence Karpuzovska attributed the recent spate of blackouts to a surge in demand over the holidays.

The independent regulatory commission says it will investigate accusations against EVN and issue a report. EVN will have to justify every instance of loss of service and to explain the power outages that affected some entire villages and neighbourhoods. The penalty for an "unjustified" blackout is 5,000 euros.

Regulatory commission head Slave Ivanovski warned EVN might even lose its licence to operate in Macedonia, with the government then awarding the contract to another firm.