Tuesday, February 19, 2013
SOFIA, Bulgaria (AP) — Bulgaria announced Tuesday that the license held by a Czech company for power distribution in parts of the Balkan country will be revoked following allegations it systemically broke procurement rules.
Prime Minister Boiko Borisov told reporters that the state energy regulator will strip CEZ of the license later in the day. He did not elaborate. Prosecutors investigating CEZ's operations said earlier that there were "systematic violations" of public procurement rules.
CEZ, which insists it hasn't breached regulations, had 9.9 percent of its 2011 revenue from Bulgaria, making it the company's second-largest market after the Czech Republic.
In January, Albania revoked the license of CEZ and announced that electricity distribution would return to government control following a yearlong quarrel over missed contract commitments.
In Prague, the company's spokeswoman Barbora Pulpanova on Tuesday called the statements by Bulgaria's prime minister and prosecution "a serious breach of Bulgaria's law as a member state of the European Union."
"The only authority, which has the power to make a decision to start the procedure of license revoking, is the independent energy regulatory office. We have not received any official information from it about any intention to make such a step," CEZ said in a statement.
The Czech company also said it "fully meets all its obligations" and "categorically denies any wrongdoing that might theoretically lead to start the procedure of license revoking."
The move comes in the wake of nationwide protests against skyrocketing electricity prices. Tens of thousands of Bulgarians took to the streets over the last days to protest.
On Monday, the government sacked Finance Minister Simeon Dyankov, who was unpopular for his austerity budget policies, but the move failed to quell the protests.
Borisov, whose center-right government is losing public support ahead of general elections in July, also said electricity prices will be cut by 8 percent.
However, he categorically rejected demands by protesters about a nationalization of the three foreign-controlled power distributors that dominate the local market: CEZ and Energo-Pro from the Czech Republic, and Austria's EVN.
"I won't be the one who will go for nationalization of anything in Bulgaria," Borisov said.