Competition regulator president Bogdan Chiritoiu said during the Mediafax Talks About Competition conference that the Competition Council is working with the European Commission is checking whether the bilateral contracts signed by Hidroelectrica with various clients can be considered state aid.
“If the practice is considered state aid, the European Commission forces you to end the practice, and the money taken from companies is returned to the state,” Chiritoiu said, adding the European Commission is checking whether an investigation is in order.
Chiritoiu went on saying the competition regulator has been looking at the electricity market for over a year now, and an investigation has been launched recently, targeting potential anti-competition practices in the bilateral contracts mentioned above.
“Inspections have already been made. (…) I do not expect things to conclude fast,” Chiritoiu said, adding all companies involved in the investigation could receive fines.
The bilateral deals in question were negotiated directly between Hidroelectrica and the beneficiaries, dubbed “wide guys”, and they come with very low, non-competitive, prices for the electricity delivered.
On December 1, 2011, Hidroelectrica initiated negotiations with all bilateral contract beneficiaries, in view of increasing prices and reducing deliveries and timeframes.
The renegotiation of bilateral contracts and the lawful termination of the non-renegotiable ones, were requested by the International Monetary Fund, or IMF.
The deadline set by the IMF for the completion of renegotiations was February 15, but talks had not been completed by that date. As such, the Economy Ministry, majority holder within Hidroelectrica, asked the Justice Ministry to look at the documents in view of termination possibilities.
The contracts were sent to the Justice Ministry at the request of the IMF, even if the beneficiaries accepted the conditions imposed by Hidroelectrica, people close to the matter told MEDIAFAX recently.
Hidroelectrica started concluding direct supply contracts in 2000, and half of these agreements were extended until 2018.
Companies having direct sale contracts with Hidroelectrica include Alro (ALR.RO), Romania’s largest energy consumer, as well as traders Energy Holding, Alpiq RomEnergie, Alpiq Romindustries (former Buzzman Industries).