Leaked data on profits at privatised utility KEDS put pressure on Kosovo’s PDK

Leaked data on profits at privatised utility KEDS put pressure on Kosovo’s PDK
By Iulian Ernst in Bucharest August 9, 2017

The Turkish investor that took over the majority stake in Kosovan electricity distribution utility KEDS in 2013, Calik-Limak, recovered its money in the first year of operations from the net profit generated by the company, Zeri daily reported quoting leaked financial statements from KEDS. 

This supports allegations related to the subdued privatisation price and has significant political impact. At the time of the privatisation, local media and opposition party Vetevendosje (still in opposition after the June general elections but gaining significant momentum) questioned the low price paid by the Turkish investor. The deal prompted street protests against the then government led by the Democratic Party of Kosovo (PDK), which is currently trying to form a parliamentary majority even though its coalition won only 39 of the 120 parliament seats in the election.

The figures revealed by the daily support the corruption allegations at a critical moment: the privatisation was carried under the term of PDK minister of economy Besim Beqaj. The party’s credibility came under pressure as more of its leaders including Begaj came under investigation last autumn. The PDK, which has dominated the country's political scene for the past decade, may no longer enjoy the support of the international community, analysts speculated at the time.

The Turkish consortium Calik-Limak acquired KEDS for €26.3mn in 2013. At the time, the consortium pledged to invest €300mn over 15 years. Before the privatisation, KEDS had been part of the state-owned electricity generation and distribution company KEK, which is now solely a power producer.

So far the investors in KEDS have derived net profits three times higher than the price they paid for the company, the daily claims.

Thus, KEDS generated €30mn net profits in in 2014 alone, the daily said, quoting the company’s financial statements. Later, KEDS and KESCO (the supply arm separated in 2015 from KEDS under the supply-distribution unbundling process) reported €31mn net profit in 2015 and €25mn in 2016 — a total of €86mn in the three years.

Kosovo's Economic Development Minister Blerand Stavileci commented in 2016 that cash collection of KEDS has gone up and losses have dropped since the privatisation. “This is our common objective and a good step forward,” the minister added at that time.