SE privatisation plods on
Despite receiving initial
recommendations from its advisor on the last of
Slovakia's major privatisation deals, the government has
not yet rolled out its plans for the sale of the Slovenské
elektrárne (SE) electricity producer.
After being advised in mid-March by
PriceWaterhouceCoopers (PWC) to split SE into two
subsidiaries ahead of its sale, the parliamentary
committee steering the privatisation forwarded the
recommendations to the government, which is expected to
decide on the proposal by late April.
Government representatives and the Economy Ministry say
they are still looking for consensus before deciding
whether to sell a 49 per cent stake in SE as a whole, or
49 per cent stakes in two halves of a divided SE - one
representing conventional power production, the other
representing the country's two nuclear facilities.
"I am not saying now, I have not said in the past,
and I will not say in the near future how the
privatisation [of SE] should continue," said Economy
Minister Robert Nemcsics after the PWC recommendations
had been sent to privatisation committee members.
According to government officials, eight bidders are
jostling for the purchase of a minority stake in SE, but
are more interested in the conventional power plants than
the nuclear facilities, one of which is set to be
decommissioned by 2008.
In addition, parliamentary opposition parties and
electricity unions are opposing the split of SE before
its sale, saying the whole will fetch a higher price than
its two component parts.
"Current steps by the Slovak government within the
further privatisation of the energy sector and SE
privatisation will bring additional losses for Slovakia,"
said Tibor Mikuš from the opposition Movement for a
Democratic Slovakia (HZDS) party. Mikuš is a former
director of SE and a vocal opponent of splitting the
"I am not against privatisation, but I am against
privatisation that doesn't benefit all citizens of this
republic. Privatisation under conditions where it is not
possible to determine an optimal price is simply
damaging," said Mikuš.
Although Mikuš was initially a member of the
privatisation commission, he stepped down in early April
to assume a different government committee post. He was
replaced by Maroš Kondrot from the opposition party
Smer, which also opposes splitting SE before its sale and
has raised a number of objections to Slovakia's large-scale
In late March, Smer leader Robert Fico urged the Slovak
government to sue Credit Suisse First Boston for its role
in advising the government on last year's sale of the SPP
According to Fico, Slovakia lost Sk7.7 billion (187
million euro) on the $2.8 billion (2.6 billion euro) deal
due to changes in currency valuation because the sale was
carried out in US dollars rather than in euro.
The ruling coalition, however, has dismissed the Smer
motions in the SPP case, and has promised that the SE
privatisation will be conducted in a way that brings the
greatest possible benefit to the state.
"We are definitely not going to privatise at any
price, and not as long as there is not an evident
consensus in society as a whole that the privatisation in
this or that form is advantageous for citizens of this
state," said Nemcsics.
"We are not going to leave it to the pressures of
some timetable drawn up in advance just so we can meet it.
That is not the goal of the privatisation," he said.
While the identity of the eight SE bidders has remained
confidential, the list is thought to include German
utilities E.ON and RWE, as well as France's EdF - the
three companies that bought into Slovakia's regional
electricity distributors last year. British International
Power, British Energy, and Italy's Enel are also believed
to be interested.
The government is expected to announce its plans for SE
and a shortlist of contenders by late April, after which
the approved companies will be able to begin due
diligence proceedings. The sale is expected to be
completed by the end of 2003.
While neither government representatives nor their
advisors on the SE sale have been forthcoming on an
estimated price for SE, critics of the deal have
suggested that initial bids have been significantly
higher than PWC's recommended price for the utility.
In mid-March, former SE head Mikuš charged that some
bids were as much as three times higher than PWC's
figure, meaning a difference of billions of crowns.
"It is at least curious that the estimate of the
privatisation advisor is well below the offers of
interested parties," said Mikuš.
Officials from PWC, however, say that it is not unusual
for there to be a marked difference in prices being
quoted by both sides in such a deal, as potential
investors and the privatisation advisor are working from
different information resources.
"Members of the privatisation commission should be
cautious about information associated with the SE
privatisation presented at commission sessions,"
said PWC representative Peter Mitka in answer to Mikuš's
"One should realise who is the receiver of materials.
Those submitted by the investor are different and
contain, for example, details of technical conditions of
individual SE plants, which are very positive. However,
the advisor has also presented information to the
commission on potential problems linked with the
privatisation," said Mitka.
Slovakia's power utility is projecting total sales and
revenues for 2003 at Sk48.14 billion (1.17 billion euro),
and costs of Sk48.07 billion (1.17 billion euro). The
company reported sales of electricity abroad for 2002 at
Sk1.6 billion (39 million euro).
Zdroj: The Slovak Spectator