(Podgorica, 22 March 2012) – Citizens are no longer to subsidize the kickbacks of domestic and foreign tycoons. Electricity bills in Montenegro have become the most obvious evidence of corruption, whose consequences are born by all. Someone has to answer for this.
MANS is warning the Government of Montenegro that citizens aren’t responsible for paying new subsidies to the Podgorica Aluminum Combine (KAP), nor will they bear the burden of bad policy decisions related to the privatization of this factory.
The latest conditionality proposed by the Russian owner of KAP, stating that they will facilitate the payment of the €22-million in credits owed to Deutsche Bank as long as the Government extends the agreement on the delivery of electricity at subsidized prices and lowers debts, is totally unacceptable to Montenegro’s citizens.
The arrogant and conditional behavior demonstrated by the Russian owner in the past few weeks and the Government’s inarticulate responses and the weakness it has displayed in the negotiations, demonstrate sufficiently how problematic the deals where that were initially concluded with Russian oligarch Oleg Deripaska away from the public eye.
It now turns out that we have to pay the price for someone else’s corruption. We suggest that the government not try to secure new electricity subsidies for KAP at the citizens’ expense. It should no longer be as “generous” as it has been over the past six years by granting the Russian oligarch €60-million in electricity subsidies. An amount that comes directly out of our pockets.
Not only have we been subsidizing KAP’s electricity, but the government has also extended its “generosity” towards another “strategic” partner, Italy’s A2A (which bought a significant stake in the Electric Power Company of Montenegro – EPCG). EPCG is currently selling Montenegrins the most expensive electricity in the region as a result of the kickbacks built into our electricity bills.
In this way citizens have been paying two bills, their own and that of KAP. In the meantime, not only has the Russian owner managed to extract profits from the enterprise, but he’s also managed to leave us footing a debt worth a few hundred-million euros that threatens the state with bankruptcy. Similarly if it’s true, as the Russian owner claims, that he is only losing money on his investment in KAP then why does he persist in imposing new conditions on the government and refuses to relinquish control over the factory?
In addition to the electricity subsidies for KAP, citizens are also paying the debts of the First Bank (Prva Banka). That is, the EPCG has yet to withdraw €60-million in assets in the First Bank – owned by the Djukanovic brothers – which should have been invested into the distribution infrastructure but is instead shoring up the bank’s liquidity. On the other hand, due to losses on the aging distribution network, citizens are forced to pay higher prices not only for their own electricity but also for Deripaska’s. And now they want us to also pay for new investments?
For these reasons we suggest that Prime Minister Igor Lukšić not attempt to transfer the burden of the millions of euros owed by foreign and domestic investors onto Montenegro’s impoverished citizens by raising the VAT (which has a regressive effect on income distribution). We recommend that instead of increasing the VAT, the government proceeds by taxing tycoons and gamblers, confiscating properties accumulated through criminal activities, as well as reducing the irrational spending of its own ministers and administration.
It is now time for a serious investigation that will determine the responsibility of all those who participated in making controversial decisions surrounding the privatizations of KAP and EPCG.
