Kosovo Electric Distribution Company Goes Private

By Muhamet Brajshori

In June, Kosovo government decided to privatise the Electricity Distribution Company (KEDS) by selling the company to the Turkish consortium Limak Yatirim Enerji and Calik Enerji Sanayi for 26.3m euros, the highest bid.

Critics, however, say the government is selling the company under price, which in turn will harm the economy and citizens.

According to Besim Beqaj, Kosovo minister for economic development, KEDS privatisation is in line with the government policy for economy, with no obligations towards the investors. KEDS will have to pay off the company debts, while workers, regardless of contracts, are job- guaranteed for the following three years.

“Any decision taken on KEDS is harmonised by a unanimous vote and government approved. After the announcement of the preferred bidder, negotiations for the contract started with the Limak and Calik consortium,” Beqaj said.

He added that the government will keep the right to terminate the contract if its terms and conditions are not respected, and retrieve the ownership of the company without any financial obligation to the buyer.

Petrit Zogaj, from the NGO FOL, told SETimes that the privatisation of KEDS and other public companies was fraught with irregularities, opposition from the public and experts.

“The Kosovo economy and energy sector will not benefit from this privatisation, much less Kosovo citizens,” Zogaj said.

He explained that the government must ensure that [individual] companies do not create an economic monopoly in Kosovo, as Limak and Calik already have, since the company also manages the only civilian airport in Kosovo.

“It is good news for the economy and citizens, but may take a wrong turn when the same company or a group of companies from the same country invest in Kosovo and create a monopoly. Our institutions should be extremely careful with foreign investments, and guarantee equal opportunity and free competition,” Zogaj said.

Krenar Gashi, executive director at the Institute for Development Policy in Pristina, said that KEDS privatisation suffered a lack of transparency, which is detrimental for both society and the economy. He added that the civil society had no access to the documents in this bid.

“Practices of other countries show that the physical infrastructure or network [of a company] should not be privatised, but remain in public ownership. Only through a state-owned infrastructure can there be a guarantee of an energy distribution free market, where many companies competitively offer its services,” Gashi said.

He added that the bid price was low, as more than 180m euros were invested in the company, but the sale price was 26.3m euros.

Soon after the KEDS privatisation decision, Kosovo’s Energy Regulatory Office decided to raise electricity bills by 8.9% in a country where 16% of citizens live on $1 (0.81 euro) per day, and face an unemployment rate between 40% and 45%.

Citizens are disputing that rate increase saying they are being overcharged.

Fitim Shaqiraj, from Pristina, told SETimes he received electricity bills that do not reflect actual consumption.

“The last few months were terrible. We got bills which charge more than we consumed. I don’t know where those people live who increase the prices, but we are now in a situation where one member of the family needs to work just to pay the electricity bills,” Shaqiraj said.