Romania's Seres says politicians trying to rig bids

History

Romanian Economy Minister Codrut Seres said politicians and lawmakers have put pressure on him and the heads of the country's main energy producers to sell power at preferential prices.

Seres said closely held companies are using the influence of lawmakers and mayors „from the entire political spectrum” to help them win tenders or buy power at low prices from state-owned companies to boost their profits. He wouldn't name the companies or the people involved in rigging power bids. „I was made a proposal to alter the order concerning energy sales,” Seres said in a statement broadcast by the Realitatea TV news channel yesterday.

Seres this year issued an order that power can be sold only through a power exchange, starting January 1, to reflect market prices. Romania is opening its markets to competition as it joins the European Union on January 1, together with neighboring Bulgaria. The country of 22 million also has to crack down on corruption more firmly, the EU has said. Seres said he had temporarily suspended the heads of Electrica SA and Romgaz SA, the national power and natural-gas producers, to allow for an investigation at the two companies.

Electrica general manager Nicolae Coroiu could not be reached for comment. The company's spokeswoman, Elena Voinea, didn't answer calls on her office or her mobile phone. In a statement broadcast by Realitatea TV, Coroiu said, „We hope there will be no surprises and no legal problems at Electrica.” Romgaz's general manager, Alexa Iakob, couldn't be reached for comment.

A Romgaz spokesman, Mircea Hodarnau, said yesterday in a phone interview that Iakob's official statement was posted on the Web site of the government's newswire, Rompres. In the statement, Iakob said Seres didn't ask him anything before suspending him. „I'm still waiting to see why this is happening,” Rompres cited Iakob saying. „It seems it has nothing to do with the management at Romgaz.” Seres and other government ministers on Wednesday will discuss Romania's power security and attempts to rig power bids with President Traian Basescu at the country's Supreme Defense Council meeting on energy issues.

The members of the defense council will also scrutinize parts of the sale contract in 2004 of oil and gas company Petrom SA to Austria's OMV AG, on grounds that the former government granted OMV the right to keep unchanged for 10 years low-tax allowances, including oil extraction royalties, Seres said. „I asked the minister to not accelerate the process of privatizing energy companies, particularly Romgaz, and only take up the issue after analyzing privatization of energy assets up until now,” Basescu said November 15. Romgaz is Romania's sole natural-gas producer controlled by the state after the sale of Petrom in 2004. (Bloomberg)

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