The merger of RADET with Elcen, which, according to the municipality of Bucharest, will solve the city’s heat problems, was approved Tuesday by the General Council of Bucharest Municipality (General Council), after two previous meetings hasn’t raised the required number of votes. In the voting session from Tuesday’s meeting, the project was approved by all 48 councilors present.
The project aims to respond to the “call of the Romanian government to issue a law on the transfer of the shares from of Electrocentrale Bucharest SA from the state’s private property to private ownership by Bucharest, under the provisions of the Memorandum approved in the cabinet meeting on 27 March 2013 with the subject ’Realizing the public service of supplying heat through a centralized supply system (SACET) in Bucharest and Constanța”.
The document was on the agenda at the General Council’s meeting in 4 and 30 September, but has not been approved as city councilors from PDL and PNL left the room and the rest could not gather the necessary number of votes, two-thirds of the council members. Official sources told Mediafax that the Government will provide 100 million lei to City Hall, money that will be transferred to Elcen for giving RADET the necessary energy to distribute hot water and heat to households.
The Autonomous Thermal Energy Distribution Bucharest (RADET) is subordinated to the mayor’s office, and Elcen – Electrocentrale Bucharest, the heat supplier for RADET, belongs to the Ministry of Economy, through the Department of Energy. The new entity, which will result from the merger, will be subordinated to the municipality.
Hope for centralized heat supply in Bucharest
Sorin Oprescu, the Mayor of Bucharest, claims that the merger will solve the heat problems in Bucharest, the debt RADET has to Elcen will be erased, and the municipality will control and coordinate both production and distribution of heat and hot water.
Debt was the reason why, recently, several sectors of Bucharest had a few days without hot water. Distrigaz reduced the gas pressure given to Elcen, due to sums it hasn’t received from it. In turn, Elcen, which has debt to collect from RADET, limited the gas supplied to the utility, so this one was forced to reduce the hot water’s temperature.
Elcen said that it accumulated 88 million lei of debt to Distrigaz, while has to get from RADET about 2.5 billion lei, without including the penalties, for heat delivered and unpaid during November 2012 – September 2014.
Regarding the debts which RADET ows to Elcen, Oprescu said that “starting six years ago, the citizens of Bucharest payd penalties for immeasurable penalties.” “Consumption of hot water and hot water radiators consumption was paid every year on time. Debts are penalties applied to penalties through a financial scheme brought by an unjust law in 2001 by ANRE”, says the mayor.
In 2013, the General Council approved the reorganization of RADET that would be done in two stages, namely first – transform it into a company and sign with the company resulting from the reorganization of RADET a contract management regarding the administration of the public service, and the second stage – the merger of this company with Elcen Bucharest (resulted from dividing Elcen).
In early October, the division of heat producer Elcen ended, part of its assets was transferred to Electrocentrale Constanța and Electrocentrale Titan, two newly established companies. The remaining company and Electrocentrale Constanța will pass to local authorities to merge with RADET.
After division, RADET Bucharest will be turned into a commercial enterprise, and the shares of Electrocentrale Bucharest will be transferred to the private property of Bucharest City Hall, followed by the merger of the two companies.