EPCG sold electricity to Toščelik below cost

Based on the report of the Ministry of Capital Investments, the prosecution is investigating EPCG’s contracts for the sale of electricity. State Railway Infrastructure paid for electricity at 30 to 50 percent higher prices than Toščelik, even though they belong to the same group of consumers

Got significantly cheaper electricity, especially in 2020: Toščelik, Photo: Svetlana Mandić

Elektroprivreda sold electricity to Željezara “Toščelik” at significantly lower prices than other consumers in the same category, which is a possible criminal offense of abuse of office in the business to the detriment of the state energy company. This is stated in the information that the Ministry of Capital Investments sent to the Special State Prosecutor’s Office (SDT) on February 22.

The SDT unofficially informed “Vijesti” that an ongoing reconnaissance was initiated on the basis of that letter.

According to the information in the report that “Vijesti” had access to, Željezara “Toščelik”, ie its owner “Tosjali grupa”, paid for electricity at 30 to 50 percent lower prices than for the Railway Infrastructure, although both companies are in the same groups of direct consumers. “Toščelik” is a private company, and the Railway Infrastructure is a state company of public interest.
According to the contracts for 2018, “Toščelika” was contracted a price in a higher tariff (expensive electricity) at a price of 4,695 cents per kilowatt-hour, and for the Railway Infrastructure of 5,4879 cents. In the same year, the price of electricity at a lower tariff (cheap electricity) for “Toščelik” was 2.347 cents per kilowatt-hour and for the Railway Infrastructure 3.0962 cents.

In 2019, “Toščelik” paid for expensive electricity at the price of 4.9767 cents per kilowatt-hour and cheap at 2.347 cents, while the prices of 5.4576 and 3.7703 cents per kilowatt-hour were valid for the Railway Infrastructure.

In 2020, a single price of 2,347 cents per kilowatt-hour was agreed for “Toščelik” in both higher and lower tariffs, while at the same time the prices of 5.4576 and 3.7703 cents per kilowatt-hour were valid for the Railway Infrastructure.

In this three-year period, 115 million kilowatt-hours were delivered to “Toščelik”, so that the difference in the price of one, two or three cents, makes possible damage for the state energy company of two to three million euros.

According to the data on the final calculation, “Toščelika” was charged 68.9 percent of the consumed electricity in this period at the so-called cheap night tariff, and only 31.1 percent at the more expensive tariff.

The information of the Ministry sent to the prosecutor’s office states that from these contracts and data, there are grounds for suspicion that the management of Elektroprivreda concluded contracts on electricity supply with “Toščelik” to the direct detriment of the company, by negotiating a lower price for electricity.

This, as it is considered, deprived the state energy company of significant revenues, and at the same time enabled the benefit for the private company “Toščelik”.

The Assembly of Shareholders of EPCG, at which the previous board of directors will be replaced and a new one will be elected, will be held on March 16. After that, the new board of directors will initiate changes in the company’s management.

They also increased the deviation limit so that the owner of the Ironworks would not pay penalties

As stated in the information, Elektroprivreda has on two occasions enabled “Toščelika” that the limit of deviation of the contracted quantities of electricity can be plus or minus 50 percent, which enables it not to pay the increased price or compensation in case of deviation in energy takeover in the contracted volume.

The usual maximum allowed limit in the deviation from the taken over electricity was previously up to 20 percent, but with the annex to the contract from April 2019, it was increased to 50 percent, which is also stated in the contract from August 2020. In case of exceeding such broadly defined allowed deviations, “Toščelik” would pay the excess of the taken over energy at the increased price by 20 percent, while for the agreed, but not taken over amount of energy, it would pay the reduced price by 80 percent.

With this expansion of the limit of deviation from the agreed quantities, a significant concession was made to “Toščelik”, because the possibility to pay penalties for overdrafts was reduced.