Turks Sound Wary Over KEK Upgrades

The Kosovo Energy Corporation, KEK, has signed more than 400,000 euro in contracts to upgrade its distribution network – just before it is due to come under the ownership of a Turkish consortium.

The largest contract, totalling 339,158 euro, involves strengthening and expanding the distribution network in Pristina, Prizren and Peja.

Three others, worth 98,146 euro in total, concern the expansion of substations in Ferizaj, Peja and Prizren. All were signed in February.

KEK spokesman Viktor Buzhala said KEK had received approval for the upgrades from Kosovo Calik Limak Energy, the Turkish consortium that assumes ownership of the power grid on May 6.

KEK has made it clear it also expects Calik Limak to pay for the projects.

But Ferhat Dinc, a representative of the Calik Limak, declined to endorse the upgrades to Balkan Insight. “We will take over the distribution in May [but] we are not interested in KEK’s activities,” Dinc said.

Kosovo Calik Limak Energy, a consortium of three Turkish firms, purchased the power distribution network, KEK Electricity Distribution and Supply, for 26.3 million euro last October.

Calik Limak will take over an aging, unreliable power grid, and is promising to invest millions of euro.

It also will inherit a base of customers who have a history of not paying their bills.
In 2012, KEK reported that the value of unpaid power bills now totalled around 400 million euro.

According to KEK, the contracts signed in February are extensions of a larger upgrade project from 2010.

“Additional works were requested for different reasons, such as property problems, obstacles during contract implementation and other issues,” KEK spokesman Buzhala said.

“It was delayed until this year because last year there was no budget,” he added.

Fllanza Hoxha, privatization project manager for KEK Electricity Distribution and Supply, told Balkan Insight that the grid’s new owner is obliged to see through existing, inherited projects.

“Works cannot be stopped or stagnate because of privatisation and should continue according to the KEK management’s plan,” Hoxha said.

The new contracts “cannot be changed or stopped, or deviate, from the framework that the Energy Regulatory Office has allowed,” she added.

Companies handpicked:

KEK handpicked the companies for the four contracts, which bypassed standard tender procedures.

Normally they call for a bidding process, but KEK invoked a provision of Kosovo’s Law on Public Procurement to get round this.

The provision allows contracts to be agreed and signed where detailed specifications cannot be supplied in advance.

The upgrades are due to completed in this spring. The expanded substations, however, were completed last year, before KEK signed the new contracts.

“Work was completed by New Year. Very good work has been done there,” said Nexhmi Ahmeti, owner of the Monten company, which completed one of the substation expansions, in Ferizaj.