Prishtina, 06.03.2013 – Compared to 2010, there is an increase in the profit of Publicly Owned Enterprises by 11.8 percent, namely there is a better performance, said the Minister of Economic Development, Besim Beqaj before the Assembly Committee on Public Finance Oversight, presenting the Report on Central POE performance in 2011.

Minister Beqaj stated that the Report presented to the Committee is based on reports of external auditors, regulatory offices, and the POE Annual Report, and in cases of discrepancies the regulator’s opinion prevailed.

“This report shows the operational performance indicating results, efficiency, and the quality of services, it also includes our financial performance assessment, indicating turnover, expenditures, and profits, corporate governance, functioning of the Boards, accountability, and business planning they must carry out, as well as challenges to addressed in the future”, he added.

Beqaj said that this is not the best solution possible, but that the improvement has come due to introduced accountability, and the regulation and monitoring put in place.

According to him, there are two companies that have notably increased their financial profits, two companies that have turned around into profitable companies after showing losses and 7 companies that have reduced losses, marking a progress in addressing their issues.

Energy 

In terms of the energy sector, Beqaj said that there are many problems, and that Kosovo needs around 1300 MW in maximum peak load, and even when generating in full capacity with installed capacities, this is not sufficient.

“According to the report, we have higher coal production compared to the previous year, we have much higher electricity generation compared to the previous year, and there is a reduction of commercial and technical losses. Collection has also increased and losses in transmission have been reduced by 0.32 percent, and the transformer’s capacity has increased from 1500 Megawatt hour in to 1800 Megawatt hour”, said the Minister.

Beqaj also stated that subsidies in this sector also were reduced, removing the burden from citizens. 3 years ago we had 40 million Euros in subsidies, this year we only have 11 million Euros, and there were 25 million Euros investments to improve the environment coming from KEK’s own sources and there is no business complaining on chronic lack of electricity damaging the economy.

“The winter of 2011/2012 was one of the most severe energy periods in the region and we have had no power cuts. We have traded no more than 200 MW in the market and the price reached 300 Euros per MW, which is above our average, at around 100 Euros; hence, there is an improved performance”.

Telecommunication

Speaking on the telecommunication sector, the Economic Development Minister said that his Ministry received powers over the telecommunication and carried the necessary reforms to ensure that this sector is functional and stable.

“There are no significant ups or downs in the telecommunication sector, and this is not only valid for this sector in Kosovo, but beyond. This is addressed to both internal operation of enterprises, and also to the general functioning in communication”, said Beqaj.

The Minister stated that in terms of the transport sector, Prishtina International Airport has seen a decrease in profits, but we have to emphasize that this sector was issued on concession, and the financial separation has had an impact in reduced profits for PIA, but the Airport’s performance was not affected.

“In terms of Railways, it was split into two entities, Trainkos dhe Infrakos, which are fully functional and owe their operations to subsidies, because as a result of National decisions Trainkos is not allowed to be profitable as we have a subsidized “free movement train”.

Water

On the Water sector, Minister Beqaj said that we have regional water-supply companies, regional irrigation companies, and the Ibër-Lepenc system. He also added that the decline in Ibër-Lepenc cannot be attributed to the management, as this wouldn’t be fair. Last year climate conditions didn’t allow the basin to have more water, which has affected their performance.

“I want to tell you that Kosovo is in the regional level in terms of water losses. Albania had 60% losses of water in total, Macedonia 63 %, Bosnia and Herzegovina 50%, Croatia nearly 50%, Slovenia 26 %, and we are in the level of 60 percent in the past year, and this year it is 57 %”, he added.

Waste

According to Minister Beqaj, there are improvements in waste management companies compared to the previous year, particularly in terms of collections. The main problem in these companies is not the management, but rather non-collection, which comes as a result of the failure to respect payments by municipalities.

“Therefore, funds are allocated in the budget, and we have had companies which were near collapse with debts to the companies reached as much as 3 million Euros, including the Municipality of Prishtina, but other municipalities as well. It is not right for these municipalities if the get these funds from the budget, and do not pay companies for the public services”, he added.

The Minister said that there was a reduction in total of subsidies between 2010 and 2011 by 26.5 %, and that these taxpayer funds were saved as a result of a better performance of these companies compared to the previous years.

“Capital projects we have installed in 2011 include KOSTT, Railways, Water, and Wast sectors. A total of 12.3 million Euros were allocated from the budget, and managed to reduce capital investments as POEs have had a better performance, as is the case in KEK, with investments of 25 million Euros from own sources, while total subsidies reached a level of 35 million Euros (for all POEs).

Providing clarifications on the delays in the submission of the report, the Minister explained that there was a lack of a provision in the law in terms of external audits for POEs and the Ministry had no possibility to draft a Performance Report without financial statements.

“The Law we have initiated last year, adopted and in force currently, now envisages a deadline of no longer than May 30 to submit financial statements. This is a measure introduced to no longer have such situations, and this is a direct action MED undertook to address the issue of future reports and to also regulate payments of Boards”, he added.

Minister Beqaj stated that the in the new law, payments of Boards of Directors in POEs cannot exceed over 50% of the payable amount, and new regulations on official trips and use of vehicles in POEs will also be introduced.