Contracts that go only to certain groups create an unfair framework and cost the taxpayers EUR175-275 million every year only at Hidroelectrica, said Franks in a press conference at the end of the stand-by agreement evaluation.
Regulations are essential to ensuring a stable market, protected from abusive practices, Franks added.
Referring to state companies in general, the IMF official said they must become sufficiently attractive to private investors, by removing regulated prices and allowing the private sector to hold controlling interest, in order to continue investments with new capital.
In December, Hidroelectrica said it would terminate its bilateral deals concluded outside the energy market OPCOM at the earliest possible time. Last week, general manager Dragos Zachia said the company was negotiating direct sale contracts for a 20%-25% increase in delivery prices and a 10%-20% decrease in volumes delivered.
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 aluminum maker Alro Slatina (ALR.RO), Romania’s largest energy consumer, as well as traders Energy Holding, Alpiq RomEnergie, Alpiq Romindustries (former Buzzman Industries).
At the end of 2011, Hidroelectrica terminated direct sale contracts with mining company SNLO, Salrom and CLMB Patinoar Brasov, while Luxten Lightning gave up the agreement “for image reasons.”