Kosovo sells power distributor, protesters clash with police

PRISTINA Wed Oct 17, 2012 10:39am EDT

1 of 3. Protesters face a police barricade in front of a government building in Pristina October 17, 2012. Police arrested more than 60 demonstrators during a protest against a deal involving the sale of a state-run electricity distribution network to a private Turkish consortium, according to local media.

Credit: Reuters/Hazir Reka

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PRISTINA (Reuters) - Kosovo sold its state-run power distributor to a Turkish consortium on Wednesday for 26.3 million euros ($34 million) in an effort to reduce losses and recoup some of the debts owed to the company, estimated in the hundreds of millions of euros.

As the signing ceremony took place, police clashed with protesters opposed to the sale of state assets.

Turkish consortium Calik Holding and Limak bought 100 percent of KEDS, a unit of power utility Korporata Energjetike e Kosoves (KEK), and pledged to invest 300 million euros over the next 15 years.

"For us it is important to offer energy, and good quality energy," Limak Chairman Nihat Ozdemir said at the ceremony, pledging good service to consumers in the impoverished Balkan country, who have suffered chronic power shortages.

Under the terms of the sale, the new owners are obliged to retain the distributor's 2,700 workers for the next three years.

The company will serve some 400,000 costumers and operate Kosovo's entire distribution network, which has faced years of financial losses due to technical problems, theft and poor collection of bills.

Calik Holding and Limak will also be responsible for collecting debts accumulated over the past 13 years and which now total some 400 million euros. The company will receive 20 percent of each bill collected.

Istanbul-based Calik Holding has interests ranging from energy to media. Limak is an infrastructure-to-energy company.

Kosovo's opposition Vetevendosje (Self-determination) party opposed the sale and rallied hundreds of supporters in an attempt to blockade the government building where the signing ceremony took place.

"Our wealth is going and all we'll be left with is EU visa liberalization and a way to leave the country, because this boat is sinking," said party leader and parliament deputy Albin Kurti.

Riot police used pepper spray to disperse the crowd and they said they arrested more than 60 people.

A former Serbian province of some 1.7 million people, Kosovo has an estimated 14 billion tonnes of lignite reserves for the coal-fired plants that produce most of its energy.

The country declared independence from Serbia in 2008, nine years after NATO bombing helped to halt the 1998-99 Kosovo war.

(Reporting by Fatos Bytyci; Editing by Anthony Barker)

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