site.btaParliamentary Ad Hoc Committee Adopts Report on Probe of CEZ Deal, Draft Resolution

Sofia, May 10 (BTA) - The parliamentary ad hoc committee probing the intended sale of the Bulgarian business of Czech energy group CEZ Thursday adopted a report on its activity and an accompanying draft resolution.

At its previous meeting on Tuesday, the committee failed to reach an agreement on the report and a working group was set up to revise it. At Thursday's meeting, the committee members from GERB and the Movement for Rights and Freedoms (MRF) signed the report with reservation.

CEZ's announcement earlier in the year that it had decided to sell its Bulgarian electricity distribution business to an obscure local company, Pazardjik-based Inercom Bulgaria, wholly owned by Ginka Vurbakova, triggered a political turmoil in this country. The government initially said it wanted to be involved in the deal but subsequently reconsidered. In mid-March Parliament set up an ad hoc committee to look into the details of the intended deal, including the origin of funding that the buyer would use.

The ad hoc committee's report reads that the forthcoming deal between CEZ and Inercom Bulgaria does not comfort to and does not implement the requirements set in the 2003 Electricity Distribution Companies Privatization Strategy, and Inercom Bulgaria does not meet any of the criteria for candidate investors in electricity distribution companies.

The draft resolution tasks the Council of Ministers with conducting by this year's end a thorough analysis of the implementation of the targets set in the Electricity Distribution Companies Privatization Strategy, and with revising the provisions relevant to the energy sector in ordinance No. 181 on determining strategic projects and activities of importance to national security. The revisions should introduce key assets and activities of electricity distribution companies in this ordinance.

The draft resolution also tasks security services with presenting to Parliament a detailed analysis of their actions aimed at informing the competent bodies of the Executive with the planned sale of CEZ's business in Bulgaria.

The Bulgarian National Bank is tasked with presenting information on the commitments made by Bulgarian banks in relation to the CEZ deal.

Ad Hoc Committee Chairman Zhelyu Boychev commented that the committee' tasks were partially completed in the sense that it became evident there are certain weaknesses in legislation and in institutions' responsibilities. "Personally, I am not satisfied because we did not meet some of the high expectations from the committee: to determine who and with what resources is buying CEZ's assets in Bulgaria," he said. In his words, the deal has not been concluded yet but still the committee was denied access to such type of information, which is extremely irregular. Only one bank approached by the committee sent a reply, he noted, adding that the Bulgarian Socialist Party will propose a supplement to the Credit Institutions Act regarding the term "professional secret".

Boychev described as unacceptable that Bulgarian special services lack information about what stage such type of deals are on and who the persons involved in them are.

A text that was dropped from the draft resolution envisaged the Energy Minister proposing to Parliament criteria based on which the Energy and Water Regulatory Committee would exercise its new power to issue opinions on deals with assets of licensing companies. Delyan Dobrev from GERB explained that such criteria could be set between the first and second reading of a bill to amend the Energy Act, which the Energy Ministry will table in late May.