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Austrian utility power company Verbund withdraws from Greece

24 December 2010 / 09:12:48  GRReporter
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Austrian utility power company Verbund announced it withdrew from the Greek market, reported Reuters. The official statement says that the company plans to seek to reduce gradually its presence on the secondary markets, among which is also Greece and to focus on the five core markets of Austria, Germany, Italy, France and Turkey.

Verbund owns 55% of the shares in the Greek company Verbund-APT Energa Hellas, which operates in trading electricity with low voltage and is the largest competitor of the state NEC in the private sector. On the Greek side in the company participates company Energa Hellas, which holds 45% of Verbund-APT Energa Hellas. According to the information in the press the company Energa will find another strategic partner in order to continue its activities in Greece. According Imerisia there already is a candidate who wants to buy the 55 percent of the Austrians. The company’s name is Herior Holdings Ltd., for which there is no information yet in regard to whether they are a local company or foreign investor.

As early as in the autumn of 2010 the management of the Greek branch of Verbund announced that the local energy market recorded significant deviations. The main problems are related to distortions of the competition in the market, and it seems that the monopolistic position of the Greek National Electric Company has enjoyed a considerable dose of protectionism.

One of the major disorders that Austrian experts have noted is related to pricing and with the non compliance with the rules of fair competition. According to them the National Electricity Company (DEI) sells at unreasonably lower cost electricity to certain companies while keeping higher prices for others. Another problem is that the state company sells electricity to the suppliers including the VAT of 23%, and electricity end-users pay VAT of 11%. According to the private company the 50% increase on charges of routings in the past two years is also unclear. Verbund have also registered systematic higher reporting of the bills, which in many cases reaches 30 per cent of the actual value.

The total value of unclear expenditure was around 3.5 million, which Verbund have paid after the intervention of the authority to regulate the energy market and under the threat that if the amount is not paid hefty fines will follow.

Tags: Economy Companies Verbund Greece electricity indecent pricing unfair competition
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