Czech power sector may be offered for sale again next month
The Czech government's decision to cancel the sale of its electric power industry includes a plan to re-evaluate the future of the sector - including its nuclear plants, coal plants and distributors - next month, Czech officials said on Thursday. The government has been trying to sell the energy sector since 1995. Last Wednesday, the latest attempt was scuttled when the cabinet rejected bids from two potential buyers, citing their failure to meet bid conditions. Prime Minister Milos Zeman said the Czech government did not need the money at any price, adding that a direct sale of the sector could not be ruled out.
The French company Electricite de France bid 213 billion crowns or 6 billion US dollars over a longer time frame than sought by the government. A consortium of Italy's Enel and Spain's Iberdrola offered 136 billion crowns, while the government demanded at least 200 billion. Economic analyst Jiri Soustruznik from Patria Finance believes the government's expectations were unrealistic: The non-financial conditions of the tender included an obligatory minimum production of electricity and an obligation to use coal from Czech coalmines for 15 years.
The environmental group Greenpeace also blamed the low bids on the controversial Temelin nuclear power plant, which is owned by the state utility CEZ and is part of the package. However the Prague government calls the year-old Temelin plant an asset, not a liability, and rejects calls for it to be shutdown.
The ministries of finance and trade were ordered to re-evaluate the privatisation of the power sector - the largest in Czech history - in the next few weeks with a report due in February.