Power Utility Threatens To Sue Albania

Albania's power utility OSSH blasted a regulatory decision to raise the electricity price by 13 per cent on Thursday as to small a hike to save it from bankruptcy and threatened litigation against the government.

“OSSH's debt toward its foreign partners will continue to go up in 2010 by 20 billion lek (146 million euro) raising the total debt level 25.8 billion lek (189 million euro),” said the company in a statement.

“This unavoidably would send the company to financial collapse and bankruptcy,” the statement added.

OSSH, which is majority owned by Czech power giant CEZ, had requested a 24 per cent increase in the price of electricity for 2010. The company was privatized in May by CEZ for a book value of 102 million euro.

According to the privatization contract, the Albanian government will have to compensate CEZ for the shortfall in revenue that would result from the smaller price hike.

OSSH says that only 7.1 per cent of the new price hike will go to the utility, while the rest will be shared by the state-owned electricity producer KESH and electricity transmitter company, OST.

“We regard this as an attack against foreign investors, which is totally unacceptable,” OSSH said. “We will take all necessary legal steps to protect the interests of our consumers and investors,” the company added.