The sale of the Czech Republic's electricity industry has been put on hold indefinitely following the Prague government's announcement on January 10 that the tender for bids for the country's biggest generator Ceske Energeticke Zavody and six regional distribution companies has been withdrawn. The finance and industry ministries have been asked to prepare a new privatisation plan by the end of February.
The cancellation follows increasing unrest in government and opposition circles during a month when the bid deadline was extended by three weeks to allow main bidders Electricité de France and the Enol-Iberdrola consortium to come up with better offers, setting a reserve of US$6 billion for a 67.6 per cent stake. Meanwhile opposition parties had criticised the process, claiming that it lacked transparency and that the main bidders had failed to meet the key conditions set by the cabinet, in particular a commitment to buy 27.5 million tonne/year of brown coal for 15 years from mines in northern Bohemia. The parliamentary privatisation commission had already recommended that the sale be cancelled, and independent analysts had warned that the sale attempt would end in failure because of the government's excessive demands. A realistic price, they estimated, was around US$4 billion.
CEZ, which manages one nuclear power plant and 23 other facilities including 13 hydro-electric plants, made a net profit of US$170 million last year.
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