While some of the EPS employees and experts have expressed reservations about the change in the way one of the largest state-owned enterprises, the Electric Power Industry of Serbia (EPS), will be organized, the authorities say that the entire EPS system will “operate more professionally and efficiently” and that the company would be transformed into “a regional giant”.
The changes in the EPS’ Articles of Association say that the company will no longer be a public corporation, but rather “a closed joint-stock company which is completely owned by the state”, the Serbian Ministry of Mining and Energy explains.
There will also be changes in the way the company is managed – the Supervisory Board will have two more members including a workers’ representative, and all members will be appointed by the EPS Assembly, which will consist of one person.
“The first reason for these changes is that EPS could borrow money and get loans more easily. We could also take an optimistic approach and say that the second reason for these changes is that the state would have free reign in hiring proper professional management and pay them adequately, which it couldn’t do when EPS was a public company”, energy expert Miloš Zdravković says for BBC Serbia.
The change in the company’s status “theoretically enables privatization, recapitalization and conclusion of public-private partnerships”, Zdravković says and adds that the question of possible privatization is a “political decision”.
If private capital enters EPS, it would mean more pressure on this company to increase the price of electricity, Zdravković warns.
“It is only normal for private capital to pursue profit, which does not mean that EPS as a public company does not want profit, but it is limited by political decisions for the sake of preserving social peace,” he adds.
The Fiscal Council, which published recommendations for reforms in the EPS in March, did not want to comment on the changes introduced by the new Articles of Associations due to the “insufficient details” that have been published so far.
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