“Experienced lawyers should play the role of independent mediators and attempt to solve the issues at hand, which are more of a legal rather than a business nature,” explains Tomáš Pleskač, Director of Distribution and Foreign Assets. Therefore, on Friday, October 5, 2012, the General Meeting of ČEZ Shperndarje is going to be presented with a motion for a new Supervisory Board member structure and for a reduction of the number of Supervisory Board members from six to three and that of the members of the Board of Directors from three to one. “All of these experts will receive specific tasks and goals from the General Meeting of ČEZ Shperndarje, which will be linked to their remuneration. Their mandate to represent the interests of ČEZ is also going to be defined in detail,” Pleskač added.
The ČEZ Group decided to take this step after a series of unsuccessful negotiations, which have resulted, for example, in a penalty imposed on the local company due to a tax impact of the losses incurred in the distribution system. This penalty is primarily based on the assumption that the power stolen from the distribution system by Albanian nationals should have been invoiced by ČEZ to its customers, and this virtually invoiced amount should have been subject to the VAT and income tax payable to the Albanian Government. ČEZ absolutely refuses to accept this approach and has already appealed against the penalty order.
The ČEZ Group continues to do all it can to protect the value of its Albanian distribution company and to ensure its stability and long-term development. Claiming the guarantees made by the World Bank or initiating arbitration against Albania still remain the most extreme measures. Numerous companies have already had to resort to these steps as they could no longer face the unstable business environment and poor payment morale in Albania.
The ČEZ Group owns significant energy assets in seven countries abroad. Albania is the only country where the Group has not exceeded or has not even reached the planned return on investment.
The situation in Albania got more complicated early this year when, due to the drastic drought of last year, the Albanian state-owned company KESH had to import power from abroad for much higher prices, which brought it to the verge of bankruptcy; the company would not have survived without receiving help from the Albanian Government. The local Government tried to resolve the situation early this year with a decision unprecedented in Europe: all costs were placed on the shoulders of the foreign investor, ČEZ Shperndarje. Therefore, as of January 1, 2012, the local regulator ordered that the price charged to the foreign investor for power taken from KESH should be 91% higher. Following intensive negotiations, this negative impact could be partially alleviated by the regulator’s new decision to reduce the price of input power supplied by the KESH state-owned power plants from 2,830 to 2,200 ALL/MWh, which lowered the year-on-year price growth from 91% to 49%. Furthermore, a study was approved that determined the initial value of bad debt. However, the Albanian tax authority’s order imposing a penalty of ALL 4 billion (approx. CZK 700 million) has brought yet another turn in the matter.
Barbora Půlpánová, ČEZ Spokesperson