Enel talks deadlock.

(From The Slovak Spectator)

Byline: Beata Balogova Spectator staff

ONE of the last big privatisation deals involving a foreign investor might not go according to schedule. Economy Minister Pavol Rusko rattled the business community by announcing that the sale of Slovakia's major power utility, Slovenske elektrarne, to Italian power producer Enel is "not certain". Currently, Enel, the cabinet's preferred buyer of a 66-percent stake in Slovenske elektrarne, and the Economy Ministry are discussing terms of the privatisation contract. However, Rusko hinted that too many issues remain unresolved, making the Slovak partner nervous. "Enel is unwilling to accept several conditions made by the Slovak side. I am disappointed by the course of the talks. If Enel does not change its approach, I will consider other possibilities," Rusko told journalists. According to the Economy Ministry, negotiations are stalled because the Italians are quibbling over insignificant details and so far disregarding the important issues. Rusko has the authority to stop negotiations with Enel if the company does not live up to the seller's expectations. "There are two alternatives [if the Slovak government and Enel do not break their impasse]. We either recommend discontinuing the tender [with Enel], or recommend negotiating with the company that took second place in the bidding process," Rusko told the news wire agency SITA. Enel offered [euro]840 million for the 66-percent stake in the Slovenske elektrarne, putting it far ahead of the closest competitor, Czech power utility Eeske energeticke zavody (EEZ), which offered [euro]150 million less. A consortium led third place in the bidding process. EEZ says it is ready to start negotiations any time the Slovaks are ready. "Our position has not changed," said EEZ spokesman Ladislav Koiz. "EEZ has always declared that it is prepared to negotiate with Slovakia regarding the acquisition of Slovenske elektrarne at any time." Slovakia's privatisation advisor, PricewaterhouseCoopers, does not recommend that Rusko pull out of the tender process with Enel or approach EEZ. A formal decision is expected next week. The Economy Ministry has not specified what, exactly, is clogging the deal. His reticence has encouraged media speculation. According to the financial daily Hospodarske noviny, the impasse could be over the way in which the Slovak state has chosen to manage its 34-percent minority share; the return of Gabeikovo waterworks to state administration; or a long-term rental agreement with the Slovak power producer. Some experts believe that the Slovenske elektrarne ...