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Interview with
Mr. Tudor Serban,
General Director
Bucharest, February 15th, 2000
Contact:
Bdul. Magheru no.33
Sector 1,70164 Bucuresti - ROMANIA.
Contact persons:
Mr. Tudor Serban, General Director
Tel.: 40 1 312 31 63
Fax: 40 1 312 02 91
Mrs. Elena Ratcu, Director of Protocol,
PR and Communications.
Tel.: 40 1 211 28 69
Fax: 40 1 211 28 69
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CONEL has experienced several changes in the past, including its name, since it used to be called RENEL. Then it was divided among Termoelectrica, Hidroelectrica, and Electrica. Can you tell us what are all these changes aimed at?
Yes, it is true, CONEL, the National Electricity Company, has experienced a number of changes through its history. Before it was a state owned monopoly. Then, due to the changes our country went through in the 1990's a number of changes were needed. The first restructuring consisted on transforming its previous status into that of a "regie autonome". Today it is a joint stock state owned company, but with a commercial mentality. Then CONEL, embarked in a deep restructuring process. The first restructuring stage started in July 1998, when RENEL was transformed into CONEL, the transmission, distributor, system and market operator, owning 100% shares of its 3 affiliates: Termoelectrica, Hidroelectrica and Electrica. The main task of CONEL is to insure the access to the national power sector. Besides it is in charge of coordinating its 3 subsidiaries and of insuring contracts. However our three trading companies have their own income and expenses based on their own budgets. In order to keep a closer contact and coordination among us their general directors are members of the board of CONEL.
We do not control the nuclear plants since they have been separated from us, neither do we manage the two heavy water plants. This coming Autumn independent commercial operators will be able to operate freely in the Romanian market. The premises have already been set up to start up competition, we can say that the monopoly has disappeared. The prices continue to be regulated. In April 2000 it will take place the second restructuring stage, where the privatization of some distributors will be carried out.
One of CONEL problems is that companies do not pay their debts. How is that going to be solved?
That problem cannot be solved immediately, because the consumption of energy is closely related to the production of companies and with the state of the economy. Many companies have debts and cannot pay us, but we cannot cut their electricity like that. Probably the problem will be solved when the economy improves, both at government level and at a private level. For the time being many companies ask for discounts to be able to continue operating, or they ask us to cancel the penalties for paybacks. The problem is that many companies have not changed their mentality and they still think that energy should be for free, like in the old times.
Other rather big problem that we have is the decrease of consumption. Many factories have closed or are working well below their capacities, so consumption is much less than it used to be. The use is also seasonal. For instance, we have high exports in summer.
Your company has exported electricity to Moldova, but that country never paid back. Still, the closure of nuclear plants in Bulgaria and other in Ukraine might force these countries to buy Romanian energy. Are you planning to export to other countries in the area?
In fact, we export to Moldavia and Montenegro.
The problem with Moldavia is being solved at a governmental
level. But I think we have serious possibilities
to export to Turkey, Greece and Yugoslavia that
need extra energy. To Bulgaria we can export for
sure. Ukraine is our neighbor, but we are not so
sure we will export there. The percentage of exported
energy is still very small: 5%, but we have the
potential to export up to 20% of our total production.
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Many thermal generation plants will be closed shortly. Can you tell us why?
We have to close thermal plants because, as I told you before, consumption has been considerably reduced and we have to cut down expenses and consequently close down plants that are not profitable. CONEL cannot support them. We need foreign investors to rehabilitate some of these plants, because many are obsolete and need to be improved. For the next years we need to keep competitiveness in this field. For this reason we will try to transform some of these into IPP's and we are also open to joint ventures with foreign capital.
You just mentioned you need foreign investors. Can you expand on this?
Well, we have many offers for the distribution of energy, because this is a very profitable operation. However, for Hydroelectricity and thermal production we have very few offers. However, I feel that foreign investors can still be attracted to this field through the access to the network and attractive prices. But I feel the decision has to be a political one. In fact, Romania, it is my belief, will be a very important distribution point of energy in this region. The production and distribution strategy should be long term. So far we have adopted a medium term program. We have very well informed our governing parties, but still some very important laws have to be passed by the parliament, such as the energy law, the property law or the concession law. These laws will create a climate to develop properly the energy system and will allow quietness and stability in the sector.
What are your future plans and developments?
Firstly we still need to get out of winter. We entered this winter 1999-2000 without sufficient resources, so this worries us. Secondly we need to find solutions to solve our internal problems. Thirdly we have to accept that we have to "carry on our shoulders" many consumers who do not pay and we have to find solutions for that. We will continue to supply "free" energy to Moldavia, because we know we will find a solution for this problem.
We have determined a profile for next year. We will have a suppler and more flexible structure. Then we will insure the safety in the national power system. For that I will be in charge personally. We also want to permit free access of private providers to the network. We will insure the continuation of all the energy programs being in place so far. Besides, we will insure the energy distribution. And finally we will create the necessary conditions for the capitalization, privatization and the appearance of new consumers.
Could you give us a final message for our readers?
Yes, I would like to tell them that the Energy sector in Romania is a very attractive one. Romanians are very smart people, and if they are well paid they can create good things. However private management and capital is needed to help us develop. Also legislation for transition is needed. I am convinced that Romania will be an important part of Europe. I invite your readers to come and see how business is business in Romania. |
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© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Romania published in Forbes Global.
July 24th 2000 Issue.
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