Changes in EPS – What Does the New Statute Bring?

Source: RTS Monday, 10.04.2023. 09:16
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The aim of the change of the statute of EPS from a public enterprise into a joint-stock company is to bring operations into order and to turn it from a company which operates with losses into a company which earns. Both President Aleksandar Vucic and the members of the Government are categorical – Elektroprivreda Srbije is not being privatized. Complaints have appeared in the public about the new statute of EPS not being clear enough.

The Government has adopted the new statute of EPS, and when it is published in the Official Gazette, the company is to be registered at the Business Registers Agency as a joint-stock company. Along with that change, EPS should get professional management that would ensure better operations and earnings.

– We’ll see if that’s what happens. The Government is no longer adopting all sorts of frameworks and plans: for the internal organization, number of employees, salaries – that’s a much better thing. So far, the primary function of EPS has been an activity of general interest. By switching to a different legal form, into a joint-stock company, the primary goal will be to acquire a profit – that’s a big difference – says Ivan Nikolic of the Economics Institute in Belgrade.

There are complaints that the statute does not specify to a sufficient degree what the activity of general interest of AD EPS is.

– The production and trade of electrical energy is no longer the activity of general and public interest, but guaranteed supply provided to households and small purchasers is, that is a public service and EPS provides that public service. It has the license to provide that service until 2026. There is no other trader that has that capacity and that could do that. So, EPS will continue doing so and we shouldn’t be too worried about that – emphasizes Zeljko Markovic, Energy & Resources Leader at Deloitte.

AD EPS will be organized in line with the Company Act. There has also been public criticism over the fact that it no longer has the obligation to file financial reports and that, since the Law on Public Enterprises no longer applies, it is thereby no longer obliged by the Law on Public Procurement Procedures, which opens the possibility of corruption.

– According to Article 15 of the Law on Public Procurement Procedures, each spending of public funds from the budget of the Republic of Serbia needs to be subject to the Law on Public Procurement Procedures, including the case of Elektroprivreda Srbije. Also, if we are talking projects of Elektroprivreda Srbije that are financed with the funds of international creditors, international rules of public procurement procedures will apply. So, each spending of public funds, whether of the citizens of the Republic of Serbia or of EU taxpayers, will be strictly controlled and the rules of public procurement will apply – says Veljko Kovacevic, Special Advisor of the Ministry of Mining and Energy.

Experts agree as well – control and transparency of business operations are a priority so that past errors that eroded EPS would not be repeated. That is why it’s also important that the Supervisory Board will feature a representative of the employees. The Government says that the change of the legal form of EPS does not change anything when it comes to the changes of electricity prices – consent will still be given by the Energy Agency.

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