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Bulgarian Energy Minister Discretely Backs Power Utilities

Date: 23.06.2010

Bulgaria’s Economy and Energy Minister, Traicho Traikov, does not see anything wrong with outsourcing and wants to implement it at his own Ministry

Bulgaria’s Economy and Energy Minister, Traicho Traikov, defended Monday the outsourcing of services by the three foreign – owned electric power utilities in Bulgaria.

Traikov said outsourcing contracts for common services by the power utilities is a way to do more work with less people, adding he was thinking about outsourcing at his own Ministry.

“Each structure does not need accounting, legal and human resources departments. The outsourcing of these services is done by the National Electric Company (NEK)and the power utilities,” Traikov said.

The NEK audit is not yet completed.

The outsourced services are not controlled by the National Commission for Energy and Water Regulation (DKEVR). On Sunday, the Head of DKEVR, Angel Semerdzhiev, upon presenting the results of the DKEVR audit of the 3 utilities – German E.ON, Austrian EVN and Czech CEZ – said they are upping outsourcing in order to avoid control.

Also on Sunday, when announcing the findings of the report, Bulgarian Prime Minister, Boyko Borisov, said lobbying circles in Bulgaria and Europe are exerting enormous pressure on him over the auditing of power utilities, and informed parts of the audit report will be provided to the National Revenue Agency which will inspect the taxes of the power utilities. Borisov accused the utilities of using a “vicious-circle" scheme to avoid taxes and control by outsourcing 40 % of their services.

The Bulgarian daily 24 Chassa (24 Hours) published an unofficial copy of the report showing the utilities have been outsourcing their services to parent companies with higher prices.

Traikov reiterated Tuesday he is yet to read the report, pointing out the authorities must examine the business models of all three utilities and the expenses they were allowed.

The Minister further said the books of E.ON, CEZ, and EVN have been examined and certified by reputable audit companies, adding those with nothing to hide applaud the efforts of the State.

Meanwhile, CEZ distributed to the media Monday an official statement saying the company is operating in the country in full compliance with the regulations of the State energy watchdog, Traikov also explained that the electric power price is unlikely to have been affected by the outsourcing because DKEVR determines those prices only based on the expenses they regulate.


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