* Albania angry with CEZ unit for not importing power
* Compensating for imports to hurt Albanian finances
TIRANA Oct 2 The Albanian unit of the Czech
utility CEZ said it would hire U.K.-based law firm Schindlers to
negotiate with the Albanian government in a dispute over CEZ's
failure to import power last month.
CEZ Shperndarje Sh.a. angered the government and the
regulator ERE when it failed to import power in September,
forcing the state-owned KESH power producer monopoly to use up
its water reserves to supply CEZ Shperndarje.
CEZ Shperndarje holds a monopoly on power distribution to
1.1 million homes in Albania and is bound by law to use imports
to make up for any power losses - from technical faults or theft
- in its grid in the hydro-dependant Balkan nation.
"The company is seeking through (the hiring of Schindlers)
to help defuse tension in the manner of communication and take
the necessary steps to resolve the situation in Albania," CEZ
Shperndarje said in a statement late on Tuesday.
CEZ Shperndarje described Schindlers as experienced
strategic negotiators who would help end the dispute, which it
said was of a legal rather than a business nature.
Compensating for the company's imports brought the level of
water in KESH's hydro power stations just five metres above the
stoppage point and could force the government to earmark a
subsidy of up to $50 million to help KESH buy power this year,
according to Albanian officials.
Three weeks ago, ERE slapped a fine of 430 million leks
($3.98 million) on CEZ Shperndarje, equal to 1 percent of the
company's 2011 revenues.
Without providing a reason, ERE also ruled against a request
by CEZ Shperndarje to mortgage its assets in order to receive a
loan of 100 million euros ($129.35 million) from the European
Bank for Reconstruction and Development and the World Bank's
International Finance Corp.
In a warning shot earlier on Tuesday, Finance Minister
Ridvan Bode said his ruling Democratic Party could call on
parliament to press the ERE to make clear to CEZ Shperndarje
that "meeting mutual obligations is indispensable."
Bode worries that subsidies for KESH will put a strain on
the public debt, which is nearly 60 percent of gross domestic
product. The IMF called on Albania earlier on Tuesday to keep
public debt in check because of the risk to the country's