Electricity chief embraces state switch

Coming from the private sector, Horia Hahaianu, Transelectrica GM, took up the challenge of running a state-owned company. He tells The Diplomat – Bucharest the latest details on the company’s major projects. By Dana Verdes

By Dana Verdes - December 2011 - From the Print Edition

I have worked in the private sector for a long time, but the most difficult moment of my career was when I was put in charge of a state-owned firm,” Horia Hahaianu, Transelectrica GM, tells The Diplomat – Bucharest. Hahaianu was appointed GM of the state-owned energy transport operator, Transelectrica, in May this year. After half year at the helm of the company – which has 2,200 employees – he calls his work “a huge responsibility”.
“When you’re the GM of Transelectrica you have no more spare time or hobbies. You have to focus all your energy on this company. It is like a living organism, and you have to be connected to it all the time,” says Hahaianu.
“The great challenges since my arrival have been to offer competitive services despite cutting costs, to obtain solid revenues, to consolidate the company’s financial position and also to develop the interconnection networks with neighboring countries.”

Blowing hot and cold

A special problem posed by wind projects is the large volume of new investments necessary to bring about production, with no any guarantee that all the projects will be realized or secure the necessary financing, says Hahaianu. According to Transelectrica information, connecting the wind parks to the national grid involves investments of EUR 500 million. “To take over a large amount of electricity production from these plants we need investment in the development of specific consumers to take the production or to store the energy that can be used as needed when the wind does not blow,” he adds.
The GM believes that legislative proposals to support investments in electric cars and in battery-charging stations are needed. “Some of the revenues obtained from promoting the renewable energy scheme could be invested in these consumption systems, energy storage or quick start groups to replace the thermo groups that were shifted to allow the renewable energy into the grid,” says the Transelectrica GM.

Show me the money

In mid-November the Economy Ministry inked a deal with a consortium formed of BCR, Intercapital and Swiss Capital to list a minority share package (15 percent) of Transelectrica on the stock exchange. “As soon as the contract comes into effect, we will provide information for the development of the package offer, of course observing all the conditions imposed by the capital market legislation on privileged information. We want it to be a successful share sale,” says Hahaianu.
According to him, the company hasn’t had a capital increase in the last three years. “However, in the future we will consider a capital increase by attracting financial resources through the primary public offer, which we will use to finance investment that would represent an increase of about 12 percent, of course on the condition that the Romanian State remains shareholder of the company.”
Turning to Transelectrica’s shares, the company GM tells The Diplomat – Bucharest that the performance was similar to the overall market one and although the last two reports (Q1 and at 9 months) showed good results. “Yet, this was not directly reflected in the share price,” says Hahaianu. The price peaked at RON 23.49 on June 1 and hit a low of RON 16.4 on August 8 this year.

Fragile investments

Despite the turmoil on the international and national markets, the company has continued, albeit reticently, with its investment plans. This year Transelectrica announced that it had modernized the electrical stations in Lacul Sarat and Brazi Vest as well as the control systems in 11 stations.
“Next year we will continue the modernization works at the projects in Lacul Sarat, Mintia and Brasov. We also have plans to start new modernization works in Tulcea Vest, Barbosi and Turnu Severin Est,” says the GM.
While the company has notched up some concrete results in terms of its local objectives, it’s a different story with the interconnection lines with neighboring countries. Hahaianu says that the feasibility study for the Suceava-Balti connection line has been approved, and the design specifications and draft project now have to be developed. “What has not been clarified is the project financing for the portion of the line located on the territory of the Republic of Moldova,” adds Hahaianu.
The feasibility study for the Falciu-Gotesti line has also been approved and updated. Also, the additional documentation between Transelectrica and Moldelectrica to continue the project has been signed.
For the interconnection with Serbia, from Resita-Pancevo, the documentation has been completed and approved.
“What follows is to secure a Government bill for the approval of the technical-economical indicators and the start of the expropriation procedure,” says the GM.

Who is Horia Hahaianu?

He has served as GM of Transelectrica since May this year. Between 2009 and 2011, he was GM of telecommunication operator Teletrans and IT-Transelectrica Branch, and advisor to the Communication Ministry. Before 2009 he worked in the IT&C industry.