Senate: Enel accused of breaching privatisation contract

Romania’s Upper House - the Senate - has accused Italian power company Enel of failing to live up to its contractual obligations to modernise the power grid, following its purchase of state power distributor Electrica Muntenia Sud in 2008

July 2010 - From the Print Edition

A June report by a Senatorial Commission declared that the Italian energy provider has met only half of its investment commitments during 2008 and 2009.
In 2008, Enel finalised the purchase of the distributor, which provides electricity to a large part of south Romania, including Bucharest, in an 820 million Euro deal.
The investigation follows a complaint by 3,000 inhabitants of Bucharest neighbourhoods Creanga and Andronache, which have suffered black-outs. The citizens’ plight was brought to the attention of the parliament by PDL Senator Anca Boagiu.
The contract between the Romanian state and Enel states that, if the investment plan of the company is not met, the prices consumers pay can decrease by as much as 70 per cent. However, the contract also outlines that the modification of the prices can only take place after 2012.
During a visit to Romania last week, executive director of Enel Fulvio Conti told Romanian President Traian Basescu that the company plans to invest 700 million Euro over the next five years to modernise the power grid, with 210 million scheduled to be brought in 2010.
The Senate is now looking into legislative options for decreasing consumer prices sooner.