Bulgarian Parliament rejects opposition motion to sack utilities regulator head

Written by on July 5, 2018 in Bulgaria - Comments Off on Bulgarian Parliament rejects opposition motion to sack utilities regulator head

Bulgarian MPs voted down on July 5 the motion tabled by the opposition socialists, which called for the early dismissal of Ivan Ivanov, chairperson of the Energy and Water Regulatory Commission (EWRC). The motion received 63 votes in favour, with 125 opposed and three MPs abstaining.

Last week, socialist leader Kornelia Ninova accused Ivanov and the regulator of dragging their feet on the issue of the proposed sale of Bulgarian assets of electricity distribution firm CEZ.

The socialists said that the regulator failed in its legal duty to issue a ruling on the deal, intentionally shielding the proposed buyer, Bulgarian firm Inercom, which – the socialists alleged – was a front for economic interests backed by the government of Prime Minister Boiko Borissov.

Ivanov countered saying that even though the regulator is now required to rule on any deal that involves the sale of a stake larger than 20 per cent in any company that holds a licence issued by EWRC (under a bill passed earlier this year as a result of the CEZ sale controversy), there were no criteria based on which the regulator would issue its ruling.

The bill, passed in April, did not stipulate the criteria and an ad hoc parliamentary committee tasked with investigating the proposed transaction did not, in its final report issued in May, add any clarity to the issue, after the committee’s members failed to reach agreement on whether the criteria should be drafted by the executive branch of government or Parliament.

In the debate preceeding the vote on July 5, the socialists stood alone in demanding Ivanov’s sacking. Even fellow opposition Movement for Rights and Freedoms (MRF), which often backs other socialist proposals, voted against Ivanov’s dismissal.

MRF’s MPs also joined Borissov’s GERB in describing the dismissal motion as an attempt to exert influence on an independent regulatory body.

The announcement by CEZ, in February, that it intended to exit the Bulgarian market and sell all its remaining assets in the country, which include the power distribution grid in western Bulgaria, caused a political storm because of fears that the chosen buyer, little-known Bulgarian company Inercom that was set up last year, lacked the necessary know-how to ensure that there would be no disruption in the quality of service.

Questions were also raised about the source of Inercom’s financing for the deal – the company’s owner said it would be funded partially using its own equity and using bank loans – with some media reports suggesting that Inercom may be a stand-in for other, unknown interested parties.

Bulgaria’s government initially said that it intended to take a stake in Inercom in order to safeguard public interest, but Finance Minister Vladislav Goranov later said that such plans had been abandoned. In recent months, there has been further public statements on the proposed deal, from either CEZ or Inercom.

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