On October 2008, the Albanian government passed the decision for selling
the energy distribution system to the Czech CEZ company.
“This government realized a successful privatization. CEZ is a company with great managing experience. This is a new and extremely important chapter”, declared the then Prime Minister of Albania, Sali Berisha.
This was the first act of a privatization that turned into one of the biggest strategic failures of our country. The agreement entered in effect six years later. On April 23rd 2009, the Parliament approved an agreement which passed the distribution monopoly to the Czech company. Five days from this act, the Albanian former Prime Minister, Sali Berisha, attended a visit at the Government Building of Prague, to hand over Albania’s request for European Union accession to his Czech counterpart, Mirek Topolanek.
CEZ has an unlimited influence in the policy of Prague. The company has huge power, compared to EDF in France or ENI in Italy. Although it is formally managed by the government, there are suspicions that the power goes through the CEZ board of directors. The former Prime Minister himself, Topolanek, has risen up from its corridors.
Facing this situation and on the verge of the elections 2009, the government hoped that CEZ would increase Albania’s points in the European Union and the general public.
Meanwhile, CEZ was trying to transfer its Czech power model in their Tirana offices. One week before the auction, the government withdrew 57 million EUR of debts from the distribution balance and the company was cleared from losses.
But these concessions were only the beginning. The favors continued, from the increased energy price to the reviewing of the plan of losses. But the favors on paper could not hide what was happening on terrain. While there were euphoric expectancies, the Czech management deteriorated all financial indicators. The company plunged into debts and didn’t pay even the Albanian Power Corporation. The entire sector entered a chain of endless debts, reaching up to 1 billion USD.
On the same time, the CEZ leaders were paid up to 66,000 EUR per month. The fund of salaries for the management of the company reached 5 million EUR annually. Plunged into crisis, CEZ raised its pressure against the government to collect the public institution debts.
The conflict peaked in 2012, when CEZ interrupted the energy to the aqueducts of some cities, which brought public protests. This made the crisis between the company and the government official. On January 2013, the government revoked the license of CEZ and pushed them away from Albania.
“CEZ started reducing the quantity of energy that was being purchases, which was their functional duty”, declared the Albanian Energy Regulation Entity on January 21st 2013.
This act marked the biggest strategic failure of Albania, a cost that falls on the Albanian citizens and that is felt even today. Everything stayed silent since January 2013, and Albania was risking an arbitrage court. The new government started negotiations for finding a common understanding, but CEZ demanded 200 million EUR and kept threatening with arbitrage.
This is not the only pressure. One day ago, the Czech Republic openly threatened that they would block Albania’s candidate status. The irony is that CEZ was initially the hope that it would be Albania’s passport to the European Union.
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