Albania: The electric-energy sector has shifted from the collapse to public benefits, News
Speech of Prime Minister Edi Rama at the inauguration of the National Dispatcher Centre and of the New Control System SCADA / EMS:
To begin, let me greet all those who are standing. They are the most important part of this investment. Girls, boys, women and men who, provided with experience and finally with the conditions created, will transform this new brain of the Albanian power system in a strategic centre of gravity for any further performance of the system. Above all, to ensure that our reforms are implemented with a very high efficiency.
I greet all of you, and wish you all the best because you are those who have managed to maintain this centre despite the terribly difficult conditions.
I remember very well how in March 2014 when, together with the Minister of Energy and OST Director whom I take this opportunity to thank wholeheartedly for his dedication, professionalism but, above all, his iron will, we decided to transform this centre that had turned into a flooded area – there are many of you here who can witness that this area was flooding. While a contract signed with the Italian government 8 years ago to realize what we have today in front of our eyes, was totally abandoned. Everything had gone to an unknown direction.
I am very proud today that Albania has a hub of such standards and that our electric-energy system has an electronic brain of such a scale and quality.
I am very proud, but I assure you that this does not mean that I am satisfied. I’m the most disappointed person with everything, because I am aware that we have done a lot, but much more remains to be done. It is not just to make polite shop talk, but it is a truth that guides me in my work and guides us in our work.
We cannot but be proud since, on the path of reforms, we are giving back to people, step by step, among many difficulties, little by little, what Albanians are investing for reforms and what they have invested for the vital reform of the power system. A system that was drowning in debts, corruption, thievery, and was completely paralyzed in relation to Albania’s ambition to be a normal European country aspiring to join the European family.
Today, thanks to the completion of such quality of this strategic investment, you have integrated Albania into the European family, because we have entered the European system of monitoring, consumption, distribution and exchange of energy.
Work on this project, which has a considerable value, started in mid-2014. Following the realization of this project, the Transmission Operator is today a member of the European Network of Operators of the Power Transmission System. In this regard, we are integrated in the European Union.
While direct benefits for our country, for our public, our economy on the path of prosperity building for our people, are clear.
This centre allows us an optimal use of the transmission network, enabling us to optimize the use of our energy resources. Compared with the human organism, this system provides a rational circulation of blood throughout the body, thus ending a history of misuse and abuse of power generation sources, which were out of control without this system. Necessarily, the operational quality and reliability in the system are increased. Confidence in the system, which comes as a new step in the way of strengthening confidence in the radical reforms we undertook, puts us in a much more favourable position for negotiating with investors.
Many concessions have been made in the past. Many authorizations have been issued to build HPPs across Albania, from the biggest to the smallest. But we are very proud that in the few cases that we signed concession contracts, first of all, we ended the practice of giving private entities guarantees by the state for purchasing power at the expense of costumers and of the state budget; second, we paved the path to the open and free energy market.
300 million Euros will be invested in the system to increase the production of energy. On the other hand, our system today is such that it guarantees the interoperability of Albania with other countries, and in June we will attend an extraordinary event, not only for Albania, but also for Kosovo, not only for the connection of the market, but also for strengthening the links between Albania and Kosovo in the path of the national economic union, to open and operate the interconnection line with Kosovo. This is this another strategic investment that was delayed for years, which opens a completely new perspective for Albania and Kosovo.
The completion of the other connection with Macedonia is our mid-term target that will finally provide Albania full opportunities to rationalize and optimize, for the benefit of our economy and the welfare of our people, this great national asset that comes from the sources of production energy, which until yesterday was left adrift.
The guaranteed investment to start the construction of the interconnection line with Macedonia is neither more nor less another benefit that we get from the reform, which has made us reliable in relation to our international economic partners, as well as very reliable in terms of politics in our region.
The entire process is associated with advancing the major TAP project, which will increase energy security and help direct growth and job opening. But we do not remain there.
On the one hand we are negotiating with TAP what our ancestors haven’t even thought about; the portion belonging to Albania, with the same parameters and for the same reasons that Greece and other countries have taken.
On the other hand, we have begun to work intensively, and our Minister of Energy is leading the process to ensure all the necessary elements in order to start the Adriatic-Ionian gas pipeline that will connect the country with Montenegro, Bosnia and Croatia, alongside the Adriatic-Ionian Corridor, or what we call the Blue Corridor, the route that has been approved as a priority project within the framework of regional cooperation, initiated by the Berlin Process.
The situation of the sector has changed dramatically in these 32 months. Tariff reform in the power system, the solution we have provided with dignity and commitment before all economic partners in the market, to the conflict with CEZ, and the historic operation to put on the track of legality the relationship between the customer and the distribution operator, have brought us to an extraordinary favourable position. We are proud of this, but this does not mean that we are satisfied.
We are the first to be disappointed, because we it is very clear to us what remains to be done. And what remains to be done is the lion’s part, in the sense that this national joint effort should directly materialize as a small acquisition in the household economy.
I won’t dwell on the figures of network losses reduction, neither on the figures of the amount of the energy billed, or collection of bills, but I will give you just one figure: the latter are 68% more than in 2013. It’s an epoch-making breakthrough.
If OSHEE closed 2012 at a 320 million dollar loss, the company closed 2015 with a 70 million dollar profit. If, up until recently we started this reform, the taxpayers, those who paid energy, those who paid also taxes, and in addition to energy had to pay through the state budget an average of 150 million dollars every year to pay off the theft and to keep a system going, today not only we don’t have to pay 150 million dollars as tax for thieves, but we invest 150 million dollars. And this has come as a result of the joint effort to transform the system from a hole that sucked the money of the most honest people and of those who have always complied with the law, into a source of economic and social welfare.
All these things make us proud, but everyone should know that as the prime minister of the country, today I am the unhappiest person, for the simple reason because I am aware of the impatience of the people, of their great expectations, their sacrifices to cope with the pain caused by reforms, as I am totally aware of how much still has to be done.
We started a new era by drawing a red line and saying clearly that energy is not the sun or the rain produced by superior forces, God or nature – you choose – and everyone can get as much as they want without paying. Energy is not an electoral commodity either, which parties in power can trade for votes.
Energy is a national asset towards which we all have a responsibility, we all have obligations, and from which we will have back benefits of its good administration. We built on this red line a whole process. One aspect of the process is also a very important figure: the decrease of the amount of energy consumed, which means saving energy as a result of an increased awareness that you have to pay what you consume, so do not consume more than you need. A catastrophic consumption that came as a result of the fact that it was left adrift.
The decline is drastic, almost 7%. But for 2015, the consumption of electricity by household consumers for up to 300 kW has been reduced to 42%. Here is what the removal of the category has brought! That category was aimed at protecting the poor, and behind which would hide the richest speculators; all those who found a way to not pay energy, not because they couldn’t pay for it.
We have much to do, and I look forward to giving Albanians by June the news that they have been waiting for 25 years. They will pay what they consume, and the flat bills will not exist anymore. This news is of great importance, not just in terms of economic importance, but above all it has a great importance in terms of equality before the law and the liability of everyone.
We cannot build a serious state and become a serious country with a serious society, if we continue to have flat bills and invoice to someone who pays regularly more than he or she has consumed. More so today, when we are fully aware that willingly or unwillingly, Albanians supported the reform massively, and parents decided massively not to “tear apart” the future of their children, to not live at the expense of their children. Which means to not exceed in consumption today by stealing or not paying, and pass on to the next generation an open pit.
But it is not only the removal of the flat bills, it is also the sharing of successes. This is not a success for which the government, the governing parties, claim the monopoly. This is a shared success of the government and of all those families and consumers who made this success possible, by eventually being subjected to the law order within the system. This is a shared success of all pensioners, invalids, of all the families in need, of all the parents who, despite the fact of not being rich, have never avoided paying the energy bill, and this is also a shared success with all those 320 thousand customers who accepted to enter the new agreement and pay step by step their arrears.
We want to share this joint success, also because it is our obligation, with more investments. The Minister of Energy and I were proud when we went to some areas where energy remained a luxury for more than 20 years, where people had forgotten how to turn on the light, not to mention that when it was turned on the light bulb would flicker like it was giving the last breath before turning off. We are making massive investments in those areas, which not only will have improved power quality, but there will be no more flat bills in order to ensure equality of everybody before the law.
There is something that must be clear though. Those who think that they can continue to evade this big national, public, but also individual obligation in relation to this great asset, by breaking the meter, will be punished severely. Nobody will gain anything from breaking the meter!
We are making a massive investment to make it possible that eventually all customers will have their meter after more than 20 years. It is an opportunity that was created by the reform and the fact that we no longer need to spend money to fill the pit of theft, but we can spend the money to improve the system. And everybody should know that the metres are a contribution of all those who pay for energy and pay taxes. Nobody should dare and think that by breaking the metre they can continue to steal energy and won’t be punished. Punishments will be very severe.
We are also very proud of the fact that we did this reform without increasing the price of energy. This fact has been recognized widely by international organizations. It has been also recognized publicly by ERE, in a clear professional analysis: The price of electricity has not increased. On the contrary, there has been a slight reduction. Is this enough? It is not. Are we happy? Absolutely not. We want to go farther. We want to reduce the price further and fulfil the commitment concerning the energy VAT for household customers.
Everybody should understand that whether we want it or not, if there is somebody in this country who wants more than anybody else to have things done immediately, in a heartbeat, that somebody is me. But this is not possible. Those who say the opposite are kidding. They’re joking. They act like cynics while taking advantage of our government’s impatience and great expectations, of which I am very proud. But we are on that path, the direction is the right one, the determination is the right one, and obviously, most importantly, the vision is the right one.
Thanks to the Italian government are not by happenstance. Throughout these 24 years of transition, regardless of who has governed Italy, the left or the right wing, the Italian government has been and remains our most significant partner in any endeavour. Not just a partner, but a friendly country, a friendly government, friendly people who have contributed for Albania beyond their economic interests. The Italian Cooperation is not a direct economic interest of Italy. It is first of all the money of the Italian people, which the Italian governments have generously made available to the Albanian people. Certainly, Italian investors will benefit from these transformations, but this is an indirect benefit.
I am very sorry that a project like this one, which could have been realized since 2008, 2009 and up to 2013, is being realized today. This was due to a total lack of vision, a total lack of will, and above all, for a fundamentally cultural reason. Until recently energy was considered an electoral commodity for those who governed, while today it is a national asset, appreciated as such, and face to which we all have our liabilities. Customers have their liabilities, and the authorities have their liabilities.
Many thanks to the Ambassador, and through him to the Italian government. I am convinced that, despite the fact that sometimes this is unfortunately forgotten, that Italy continues and remains not a partner, but a friend of great importance. A friend that we had by our side on our most difficult days, in our most ghastly hours of this historical period throughout which we have experienced not a few bad things, and we will continue to work closely with Italy, we will continue to take forward all the projects that have remained behind, which are already on the way to being solved.
Many thanks to the OST director! I have many heartfelt words to tell him, but I will just say that he is an example of professionalism and determination. It may seem excessive, but it is not, I want to thank the Minister of Energy for his leadership and determination, as well as for the very important fact that, after me, he is the second unhappiest person in Albania for the situation we have. Not because we have not done much, but because we know very well that we have a lot to do, and we are very aware like nobody else, that people are absolutely right to expect every day more.
Their impatience is totally justified, because they have been ridiculed and trampled for many years. They have the right to expect from us, for if we do not do it, I am sorry to say this, no one else will.
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