News 13 Feb 12

Albania Probes Czech Power Giant For Fraud

CEZ Distribution, the local subsidiary of CEZ in Albania, is under investigation for fraud, accused of fraudulently billing customers and inflating losses.

Besar Likmeta
CEZ Distribution poster on customer service in Albania

A spokesperson for Albania’s General Prosecutor’s Office, Plator Nesturi, told Balkan Insight that the task force against economic crime and corruption in the Tirana’s prosecution office was "probing" the utility company.

In 2009, Albania sold 76 per cent of its shares in Operatori i Sistemit te Shperndarjes, OSSH, a company that managed the electricity distribution of up to 1 million consumers, with revenues of over 300 million euro per year.

OSSH was sold to CEZ for 102 million euro but the government helped smooth the sale by transferring new assets to OSSH and taking responsibility for 60 million euro of the company’s debts.

CEZ Distribution is a member of CEZ Group, a multinational corporation among the ten largest energy companies in Europe, both in terms of installed capacity and number of customers.

According to a report released by the Albania’s Top Channel TV, the probe by the Tirana prosecutor’s office was launched after a former company employee accused the power utility of fraudulent dealings with local customers and the state.

CEZ Distribution is accused of over-billing customers for electricity that it received from the state-owned power producer, KESH.

The company is also accused of issuing hundreds of fake fines to nonexistent customers or to regular customers who are not notified of the fact, in order to raise the extent of its losses on paper and so justify seeking a hike in electricity prices from the regulatory agency, ERE.

The company is accused also of creating fictive customers in order to justify the high level of losses it has incurred on the grid.

Contacted by Balkan Insight, a spokesperson for CEZ Distribution did not comment on the investigation or on the allegations of fraud.

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