In the Federation of BiH, the story about the price of electricity is heating up again – a topic that returns every autumn as a bad seasonal habit.
These days, there is a claim among businessmen that the price of electricity for companies will increase by ten percent, while Elektroprivreda BiH calls it all “data manipulation”. But behind the official denials is a familiar routine: negotiations are ongoing, contracts are being reviewed, and the price – as always – somehow rises in the end.
Analysts warn that the EPBiH is increasingly functioning as a political rather than a market system, while the economy is increasingly burdened by the inefficiency of the public sector.
While Elektroprivreda BiH says that there will be no price increase and accuses certain media of “hairdressing the data”, even though they are from the report of the FBiH Audit Office, representatives of the economy and economic analysts say that right now negotiations are underway that traditionally determine the price of electricity for the next period – which, apparently, means that there is still room for corrections.
“Hairdressing” or something else
Sanel Buljubasic, general director of JP Elektrorpivreda BiH, told Faktor that electricity will not increase in price in the Federation of BiH, that it is the market price for the economy in FBiH and that they do not need FERK’s approval for that.
– You from Faktor edit the data. It is not true that electricity will become more expensive, and the economy also has the possibility to buy electricity where it is cheaper, there are 18 different producers, but they buy from us because we are the cheapest – said Buljubasic.
Negotiations begin
Mirsad Jašarspahić, President of the Chamber of Commerce of the Federation of BiH, for Factor points out that the negotiations between businessmen and JP Elektroprivreda BiH are now starting.
– Letters are sent to them, this is the period when the price is being negotiated, but we do not yet have concrete data on how much it will be for the economy, it is the market price – explains Jašarspahić, adding that this certainly means that some businessmen will price their products less, and some more, everything depends on how much electricity they use, in what ratio, for production.
No surprise
Admir Čavalić, chairman of the Committee for Economic Policy and Finance in the House of Representatives of the Parliament of the Federation of Bosnia and Herzegovina and an economic analyst, told Faktor that he would not be surprised if this happened.
– This is the time when individual negotiations with businessmen begin. This, of course, affects the economy differently. Some companies charge that price from end consumers, i.e. citizens, and some cannot because they are export-oriented – explains Čavalić, and points out that with the increase in the price of electricity, the price of the product will also increase.
Pathetic
Igor Gavran, an economic analyst, points out for Faktor that, unfortunately, he is practically certain that the businessmen are right, and that Elektroprivreda’s demagoguery about market prices is pathetic.
– First of all, Eelektroprivreda is a public company that is managed and whose management is appointed and excessive administration is employed exclusively politically and without any points of contact with market principles (probably no one from the management and a good part of the employees could ever get a job there, let alone be the general director because they would be competing with experts), whose role is not profit maximization but stable supply of citizens and economy at the most favorable prices (primarily in connection with real costs, not the supply and demand relationship in the wider market, which has nothing to do with business conditions in Bosnia and Herzegovina). One of the rare competitive advantages of Bosnia and Herzegovina was the relatively low price of domestically produced electricity with a regular and stable supply, and that was the only justification for having political public power companies at all, instead of efficient market companies – explains Gavran.
Catastrophic management
He adds that in recent years, and especially this year, all positive elements are collapsing and practically disintegrating, production is decreasing, even electricity is being imported, which, as he points out, is absurd considering domestic capacities.
He emphasizes that catastrophic management is being tried to be “covered” with increasing and increasingly frequent price increases, instead of strategic changes, reforms, cost reductions and investments.
– Would market principles allow a bad and incompetent administration to accumulate losses, unable to secure enough coal in a country like BiH, which is abundant with it and where most of the mines are part of its own concern? When Elektroprivreda starts to be market managed, then such a new management can talk about market prices. Unfortunately, I don’t see any creative ideas since the price increase and I think new ones are certain.
Whether it is 10 percent or higher remains to be seen. If they could introduce destructive and unjustified block-tariffs for citizens, which also have negative demographic effects because they especially burden multi-member families, especially before the winter season when many can only heat with electricity, there is no doubt that it will be even easier for businessmen to continue increasing prices, which they have been doing for years – concludes Gavran.
