Slovakian Power Groups Will Pass To Foreign Hands

Slovakia is set to privatise its three regional power distributors to Eon and RWE of Germany and Electricité de France in sales that are expected to total more than half a billion dollars After receiving improved offers, the government's steering committee recommended Eon's bid for Zapadoslovenske Energeticke Zavody (ZSE), the western Slovak distributor, and RWE's offer for Vychodoslovenske Energeticke Zavody (VSE), the smaller eastern Slovak distributor. The committee will decide this week between the two bids for Stredoslovenske Energeticke Zavody (SSE), the central Slovak distributor, but EdF is tipped to be chosen ahead of E:NOI, an Italian power trader. The cabinet is likely to make the final decision in all the tenders next week. Bids for the forty nine per cent stakes with management control are reported to total around $400m for ZSE and VSE and $145m for SSE. Slovakia has up to now lagged behind its neighbours in privatising its power industry, which began a phased opening up to competition in January as the country prepares to join the European Union. A pilot privatisation of the PPC combined-cycle power plant in Bratislava failed recently after negotiations with AES of the US broke down. Moreover, ministers have acknowledged that the privatisation of the 49 per cent of Slovenske Elektrarne, the dominant generator in the country, will not be completed before the general elections in September. PriceWaterhouseCoopers is due to submit a plan for the privatisation by the end of this month. Investment bankers said this sale was running into more delays and potential bidders were focussing on the distributors because of the uncertainty over the election outcome. "Investors I've spoken to are just not interested in Slovenske Elektrarne now," said one banker. "It's next year's story."