THU, 18 OCT 2001 09:32:24 GMT
Waiting for the Rain to Fall
AIM Tirana, October 1, 2001
Albania is facing the most serious energy crisis in decades
Morning and afternoon, a terrific noise echoes through the streets of
the capital city of Albania. The mighty orchestra of generators is well
tuned. As if on a sign, thousands of generators rumble to life
simultaneously. When the 500 thousand inhabitants of Tirana go to bed,
they fall silent for a while. Since the beginning of last year, anyone
who runs a business, owns a shop, restaurant or a bar, had to buy a
generator for himself.
During the summer, the crisis did not seem to matter much, but with
colder days drawing nearer, the grumbling and complaining has increased.
"I have decided to shut down my shop. I am giving someone a haircut and
half-way-through it, the electricity goes out", says Llmi Shanaj, owner
of a modest barber shop close to the busy Zogu i Pare boulevard in
Minister of State for Energy Dritan Prifti is doing his best to boost
the public morale. "Compared with last year, this winter we will have
more electricity although there are still going to be power-cuts", he
says. Llmi Shanaj does not believe him. The old man, a barber for over
20 years, disagrees: "There is not going to be enough electricity and
nobody seems to care".
Bukuric Kaca, owner of an ice-cream shop in Rruga e Shallvareve street
is perfectly aware of the losses her business suffered due to frequent
power-cuts: "My earnings have dropped by half", she says. The entire
economy of Albania is affected by the same affliction. The inflation
rate previously set at 2 percent has now reached 4 percent...
Up to 1993 the 3 million citizens of Albania had no idea what a shortage
of electricity was. With a modest heavy industry production and a
private consumer expenditure not worth mentioning, the then existing
five hydro-power plants managed to produce sufficient quantities of
electrical power, at times with a surplus to export. Today, the 6
million kWh (kilowatt hours) imported daily from neighboring Macedonia
in the east and Montenegro in the north cannot cover the daily needs of
the country. Albania needs 22 million kWh per day. It produces merely 13
million kWh daily.
There is but one firm in the entire country licensed to deal with
electric-power supplies, the Albanian Electricity Corporation (KESH). A
while ago, it was transformed into a commercial enterprise partly funded
by the Italian state-owned Power Company, ENEL. Ylli Demiraj, department
manager of KESH, attempts to explain the origins of the current crisis:
"The truth is as simple as can be. The sharp rise in expenditure in
recent years was not followed by the expansion of capacities which have
retained the level they had in the eighties. Apart from the power plant
at Komane built in 1986, no other investments were made in the meantime.
In 1990, Albania consumed 3,3 billion kWh per year. At the start of the
transition process, the heavy-industry was brought to a halt and the
expenditure dropped to 2,75 kWh per year. But, with the onset of the
free market economy, many Albanian families - having dreamt in vain of
washing machines, color TVs or, simply, electrical heaters for so long -
rushed to install as many as possible wall-plugs at each and every
corner of their homes. At the same time, the number of hydro-electric
power plants and other sources of energy remained the same. And that was
when it all started. Albania’s power supply policy took the road of no
return. The first signs of crisis manifested themselves in 1998.
Minister of State for Energy Dritan Prifti, head of KESH for the past
two years, admits mistakes were made, but points out: "We cannot be held
accountable for all the misjudgments made in the management of the state
power system in the past two decades."
KESH spokesman Dritan Ylli points out the progress made in the last two
years. According to him, skilful management and the increase in the
payment-rate of 80 percent have induced the donors to untie their
money-bags. "The job done in the past two years has encouraged the
donors and as a result the sum of $100 million, frozen since 1998, was
allotted", says Ylli. The money assigned by Brussels was employed for
the reconstruction of the power infrastructure. The Albanian government,
although having subsidized KESH with 5 billion leke, is nevertheless
prepared to import a certain amount of the needed electricity. But, the
power grid is outdated and its capacity is limited.
One of the major afflictions burdening the country’s power supply
situation for a long time now is the customary reluctance of Albanian
consumers to settle their accounts. At the start of 1997, only a half of
the population paid for the power spent. In the meantime, EEK was
transformed into a commercial enterprise, meaning that the "goods"
delivered had to be paid for if bankruptcy was to be avoided. Debtors
were penalized. A special "power-police" task force was founded with the
sole task of dealing with debtors.
Dr. Zef Preci, former Minister of Public Economy and Privatization,
presently Director of the Economic Policy Institute, believes that the
best way of collecting outstanding debts is by compiling a list of
debtors employed in the governmental and public sector. This would allow
for all listed as debtors to be denied the right of being issued any
governmental certificates or diplomas before settling what they owe.
While this would certainly be beneficial to KESH, it would still not do
away with the crisis. The State Energy Minister points out that the
solution of the problem and the attainment of standard parameters call
for a long-term strategy extending to a 20-year period. He claims that
is what he is working on at the moment. On the other hand, perhaps all
is not as grim as it may seem. According to the KESH spokesman, lights
will not go out at all - in three-years time. When the hydro-power
plants in Bushot in the north and the Kalivaqi plant in Tepeleni in the
south are built and when the plant in Korci in the southeast of the
country starts production. All of the above mentioned projects are in
progress, but it will take three years to carry them out. Up to that
time, lights will continue to go out daily.
The crisis reached its peak at the end of last year when, after a long
draught, the most powerful power plant in the country broke down. At the
time, power cuts in the capital lasted up to eight hours. In the
interior, entire regions had no more than eight hours of electricity per
day. The State Energy Minister promises that blackouts will not be as
frequent this winter. In the meantime, accustomed to putting up with all
sorts of things, this year too Albanians will tacitly go on buying