ECONOMY

Call for freeze on sale of Bulgarian power utilities

SOFIA (Reuters) – Bulgaria’s two largest trade unions urged the government yesterday to freeze its planned sale of the country’s seven state-owned power distributors, to prevent a sharp rise in electricity prices. The Balkan country launched the privatization of 67 percent stakes in its power distributors last October as part of efforts to liberalize the energy sector and boost its efficiency. But officials of the KNSB and Podkrepa trade unions told a round-table discussion that power prices would soar 30 to 40 percent after the sales and the utilities’ new owners would slash at least a half of the work force. The unions said they would call on the Energy Ministry to impose a moratorium on the privatization of the utilities, which have 4.5 million customers in the country of 8 million people. The government has been gradually raising domestic power prices to help producers cover their costs. This has drawn protests that energy bills are too high to afford for people on average monthly wages of $160 and pensions of some $60. The government has said a successful utilities privatization is important for Bulgaria’s image abroad and to sustain its leading position in power exports in the region as it prepares to join the European Union in 2007. Earlier this month the privatization agency extended to February 16 the deadline for submitting non-binding bids for the power distributors. A government source close to the sale has said at least five foreign bidders were expected to place initial offers. The five were Italian energy group Enel, the Czech Republic’s state-run CEZ, German utility E. ON, Greece’s state-run Public Power Corporation and Austrian regional utility EVN. The Bulgarian government has said it expects at least 300 million euros ($373 million) from the sales.