Popescu: Utility suppliers have turned into some sort of bank

Two years and a half since taking his position, Dan Ioan Popescu, former Industry and Resources minister and currently Economy and Trade minister admits temporary defeat to arrears.

“As for attaining targets like curbing arrears and receivables, we have noticed an upward trend of the two in this period,” D.I. Popescu admitted in an exclusive interview for Ziarul Financiar. The arrears in the energy sector reach approximately 66,000bn ROL ($2bn).

The increase in arrears where the energy companies are concerned “was primarily due to the impossibility of certain energy intensive economic operators to pay both their current and overdue bills accumulated in the previous years. This, along with the swap of the debts of certain companies for shares and the sale of those shares at the market price (much below the par value), has turned the utility suppliers into some sort of bank crediting many economic operators,” the minister explains.

The failure to collect the bills for these services has rendered many electrical and thermal power and energy resources producers unable to pay their debts to the state budget. Still, as Popescu says, the enactment of a series of normative acts to facilitate payment of arrears and receivables has lead to “an improvement in collection and to a slowdown in the increase of the arrears and receivables in the economy.” The ministry is now struggling to contain at least the growth of arrears, as it is unable to either curb them or keep them in place.

Dan Ioan Popescu is most optimistic about privatisation, though. His target is to have all Electrica’s branches privatised by the end of 2004, given that the necessary procedures for five branches have already begun. Popescu’s statements are surprising, considering the signing of the privatisation contracts for Banat and Dobrogea is expected for August 2003. Which makes it hard to believe the entire energy distribution sector will be in private hands within eighteen months. adrian.mirsanu@zf.ro