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60% of power production is stolen, a failure for the Albanian economy

By   /   13/01/2014  /   Comments Off on 60% of power production is stolen, a failure for the Albanian economy

By Edison Kurani

In Albania, more than half of electrical energy which is produced, distributed and imported, is stolen in different ways by private companies and households. Many state institutions, private businesses and household consumers have been debtors for several years to the state owned CEZ Distribution, as the seller of power supply.

The drafting of many laws in line with international standards has not been able to stop the numerous abuses taken place in the past 23 years.

The existence of the law on paper has not guaranteed its application in order to stop the theft and the so called loss on the network, in the power distribution system. The loss on the network is a combination of real losses for technical reasons and theft.

Laws, only on paper

The drafting of many laws and regulations in line with international standards has not been able to stop the numerous abuses accumulated throughout the years.

Also, the existence of the law on paper has not guaranteed its application in order to stop the multiple theft, including the so called loss on the network, in the power distribution system.

A true challenge for the state

The Minister of Energy and Industry, Damian Gjiknuri says that every year, the state loses from 100 to 140 million Euros as a result of energy theft. He adds: “50-60% of the production of Albanian power plants goes to “fund” thieves, thus 60% of the power production of this country “funds” energy theft”.

This is a heavy burden, which cannot only be left to a state owned company such as CEZ. This must be a true challenge for the state. The Albanian government seems to have well understood this. Minister Gjiknuri says that if this government doesn’t improve the situation, “then this could be a real big failure for the country’s economy”.

A Task-Force to change the situation

Prime Minister Edi Rama admits the situation with power supply and considers it concerning. To improve figures and performance of CEZ, the government has set up a Task-Force on electric energy which started work this Monday (13.01).

Mr. Rama underlines the main aspects of the Task Force and the operation that is starting: “First of all, the alarming situation that we inherited in the sector of the distribution of power supply. Secondly, necessary intervention in a vital domain for the present and the future of the country, which today is a mined field and tomorrow, it threatens to turn into a field of national disgrace”.

Alarm, a dry year is coming

It’s been several months that rain falls have been less frequent in Albania. Specialists say that 2014 will be a dry year for Albania. In 2013, rainfalls have been 30% of the average of past years, which means that we must be more efficient with power supply consumption.

Figures are concerning

Official sources from the Ministry of Energy and CEZ Distribution say for balkaneu.com that 91% of household consumers and 88% of business consumers owe debts to the power supply distribution system.

Energy stolen on a large scale

Theft of power supply has become a common thing in Albania since 1991. Losses (thefts) on the network have ranged from 25 to 55% in the past 20 years.

In October 2012, 36,68% of purchased energy results to be lost. In November 43,96% of purchased energy results to be lost.

In the month of December 2012, theft has amounted to 55,46% of purchased energy.

In 2013, the situation has deteriorated. In October 2013, losses and thefts seem to have increased compared to October 2012.

Commenting on these figures, Mr. Rama says:” Energy which would light the country has clearly leaked from all sides”. The prime minister says that as of October, when CEZ has started to be managed by the new government, measures have been taken to reduce the level of losses and theft.

“In December 2013, loss has been at 2,4% smaller than in December 2012”, says the head of the government. Meanwhile, collection of payments has increased by 15%,

The most problematic areas as far as business debtors are concerned are Tirana, Durres, and Fier, where the biggest number of businesses is concentrated. The biggest debtors are those who steal power supply for gaining purposes.

Consumers: We also pay for thieves

In the capital and other main cities of the country, the level of payments from households is very high, up to 100%, but in the suburbs, in small towns and villages, the percentage drops drastically. Many consumers say that they pay not only for the energy that they consume, but also for that consumed by thieves.

“I have a two bedroom flat and all day we’re at work. We’re at home only during the evening and weekends. Nevertheless, we pay no less than 180 thousand ALL a month (140 Euros)”, says Dionis B, a 42 year old from Tirana, who works for a private business. “It’s clear that the fact that there are price increases every year and the fact that many people do not pay their bills are the reasons why our bill becomes expensive every month”, says he.

Altin K, a 36 year old, has a small shop near his home at “Ali Demi St.” in Tirana. He says that the price of energy has increased a lot. “In this shop, I only have a lamp and a refrigerator. My monthly bill is at least 25 thousand ALL (190 Euros)”, says the merchant with an angry tone. “Trade has fallen so much and the cost to keep the shop open increases constantly”, adds he. When he’s asked as to how much he pays every month for the household bill, he responds: “You do the math. It’s 5 of us at home, but grandma is the only one who stays at home. We pay no less than 15 thousand ALL (110 Euros) a month”.

The state owes to the state

The debt of public institutions for power supply is very high. State budgetary institutions owe a 5.5 billion ALL worth of debt to state owned distribution company, CEZ, for 2013. Adding public non budgetary institutions, the total debt amounts to 7,6 billion ALL. “The new government of the Republic of Albania has put this disgrace behind by paying all the debts and will put this disgrace behind by not accumulating any fresh debts. Every kilowatt of energy which will be spent will be paid at any condition and this will be the first thing that will be done”, says prime minister Rama.

Last government didn’t even pay for subsidies

One of the electoral cards promoted by former prime minister Berisha was to support the poor. Several households in need were made part of a subsidy plan as a result of the rising cost of living and rising price of power supply by several times. Disabled people alone should have been paid 3 billion ALL, but this money was never allocated.

These subsidies have never been paid. The current prime minister admits the situation: “The previous government has not paid the power supply for people in need, which the law entitles to receive support from the state in order to pay power supply, but de facto, they result to be part of the chain of debtors of the power distribution system, because the government didn’t pay them the money to which they were entitled in order to pay the services provided by the system”.

State owned oil company “Albpetrol” alone owes the state 3.3 billion ALL, more than the value of subsidies that the state owes to disabled people.

When the state doesn’t pay, the message is clear!

The behavior with the  power supply produced by this country or which is imported with the money of Albanian taxpayers is an indicator of the responsibility or irresponsibility, starting from the government to continue with the consumer, household or business consumer. Some experts say that behavior with power supply is an indicator of the quality of relations between the state and citizen. They say that the relation of citizens with the state may be easily considered as a mined field, for as long as the state doesn’t pay the power supply bills.

A question arises here: What can a state demand, what can a government demand from the rest of consumers if the state, as a consumer, doesn’t even respect any legal obligations to pay for the power supply?

This is without any doubt a message of responsibility or message of open abandonment, but at the same time also a cunning abandonment of society by the state.

At this stage, the incentive of the new government to launch an operation for the payment of energy debts by state institutions which are debtors and then other categories that do not pay, is an incentive which must be praised.

Like a known analyst says about the consequences of the culture of irresponsibility in governance or culture of irresponsibility transmitted to society through governance, “it is the irresponsible action which alone brings the lack and destruction of integrity. On the other hand, responsible action brings integrity, which in turn enables true change”. /ibna/

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