A member of the privatisation commission overseeing the sale of the electricity sector of the Czech Republic has criticised the government for bundling the state grid with the main power company. Josef Hojdar suggested that if the plan is not amended it could lead to a derailment of the whole project.
Under the current deal, the government intends to sell the dominant power generator, CEZ, along with the high voltage transmission grid and large stakes in six of the country's eight regional power distributors. The sale is set for early next year. However the country's Office for the Protection of Economic Competition (UHOS) may not be able to approve the sale because the grid is to be sold with CEZ and the distributors. If it should disapprove, the tender would have to be cancelled.
The sale did not originally involve the grid, but this was added last October. The UHOS has already implied that it is not satisfied with the current privatisation plan because it believes it will harm consumers. The sale has also been criticised by the European Union and the Organisation for Economic Co-operation and Development.
Meanwhile, three groups are interested in purchases in the industry. Electricite de France is seen as favourite but a consortium of Enel and Iberdrola and a second comprising International Power and NRG Energy are also listed as candidates. The Czech government has imposed strict conditions on the sale. Assets cannot be sold for ten years and the buyer must agree a long term coal supply contract.
The German company E.on, which was originally involved in the NRG-International Power consortium, could still end up taking over the running of the six energy distribution companies if the consortium should win the bid. Although E.on withdrew earlier this year it remains an advisor to the consortium.
E.on may also resume importing power from the Czech Republic. It cancelled a deal with CEZ in June after opposition from German green groups to the importation of electricity from nuclear generating units in the Czech Republic.
The new move comes after CEZ has indicated that it is prepared to sell power from nuclear and coal-fired plants separately.
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