Italian management spend 13 million euros in state power company for consulting services

Italian management spend 13 million euros in state power company for consulting services


By Adnan Prekic – Podgorica

The members of the anti-corruption board in the Montenegrin Parliament requested from the chief state prosecutor to examine whether there are elements of a criminal offense in consulting contracts, which is in the name of the state energy company approved by the Italian management. The Italian company A2A has been managing the state energy company since 2009 after additional capitalisation, while the Montenegrin state still has the majority ownership. According to published documents, the Italian management paid EUR 13 million for consultants services to the Italian companies, which are in the A2A Group.

Deputies in the Montenegrin parliament from Government representatives in the state power company received documents, which indicate suspicious and underlying corrupt activities. Chairman of the Board Srdjan Kovacevic who is representing the State, released a document about suspicious transactions of the Italian management with connected companies. Kovacevic accused former directors of state energy companies Enrico Malerba that, without the approval of Board of Directors, spend money for consulting services with companies which are connected with the Italian company.

Suspicious contracts were identified for the years 2010, 2011 and 2012, and it is estimated that company was set back by EUR 13 million in this way. The controversial contracts for consultation services were concluded without the approval of the Board of Directors and without a public tender.

All this shady activity of the Italian management sees the light of day now that discussions are under way as to whether A2A will remain in the state power company since the five-year contract is almost up. During the contract signing in 2009, the specific conditions that the Italian management should have fulfilled in order to keep their ownership and right to managing a company had been set. After five years of signing the contract on the strategic partnership, the Italian company A2A has no reason to be satisfied. Whether cooperation will be continued depends primarily on the construction of new power plants. The Italians are interested in building a second thermal power plant in Pljevlja.

When in 2009 the Italian company A2A bought almost half of the ownership of the national energy company it was announced that in five years the Italian partner could become the majority owner. The Italians had then paid EUR 420 million for control of the Electric Power and the right to appoint their managers at the head of the company. The original plan envisaged an increase in revenue, reduction of network losses and the construction of new power plants.

Political public in Montenegro in recent years often speculate about the pros and cons of the privatisation of state-owned Electric Power Company. Even back in 2012, a group of several members of the Parliament of Montenegro had applied to the Commission for monitoring and control of the privatization process to reach a conclusion about the success or failure of the partial privatisation of the national energy company. Montenegrin citizens are also not satisfied. They complain about the price of electricity and the claim that electricity bills are not real, that the Electric Power is a monopoly, and that is not far from the truth. A decision of the Energy Regulatory Agency in late 2009 opened the electricity market, but EPCG remained the sole supplier of electricity to citizens.