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Bulgarian Government Faces Fourth No-Confidence Vote Over Energy

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May 16 (Bloomberg) -- Bulgaria’s opposition Gerb party called a fourth no-confidence vote against Prime Minister Plamen Oresharski’s minority cabinet over what it says is the financial failure of the energy industry.

The party, led by former Prime Minister Boyko Borissov, introduced the motion to parliament, Gerb lawmaker Danail Kirilov told reporters today in the capital, Sofia. A vote on the bill, which has the backing of 94 deputies in the 240-seat assembly, will take place next week. The legislature, which is on a two-week recess for a campaign before May 25 European Parliament elections, will have to reconvene for two extraordinary sessions.

“The state of energy utilities, which are managed non-transparently,” is one of the reasons for the move, Kirilov said. “They are in a liquidity crisis, in debt and the energy system is on the brink of bankruptcy. The public has the right to know this.”

The Socialist government led by Oresharski, which took office a year ago, cut power prices twice last year after high utility bills triggered public protests in the European Union’s poorest state and toppled the previous administration led by Borissov. The price cuts generated losses at state-run National Electricity Co. and prompted investment cuts by the local power-selling units of CEZ AS, EVN AG and Energo-Pro AS.

Licenses, Debts

Bulgaria began proceedings to revoke the local power-selling licenses of CEZ, the biggest Czech utility, Austria’s EVN and Prague-based Energo-Pro for withholding green energy payments. The energy regulator says they owe a combined 347.6 million lev ($247 million) to National Electricity, which the three utilities are disputing.

The regulator has postponed a ruling on the licenses until end of June. National Electricity has debts of about 1.76 billion lev, according to a report presented to parliament in December.

Among the other reasons for the no-confidence motion, Kirilov pointed to allegations of political interference with the energy regulator and the lack of clarity over Bulgaria’s commitment to its contract with OAO Gazprom to build the nation’s section of the South Stream natural gas pipeline, which will supply Russian gas to Europe via the Black Sea.

Oresharski, a former finance minister, survived three similar votes over his administration’s security policy in February and its approach to regional development and investment in October. He endured months of rallies in the past year by demonstrators who oppose what they say is a corrupt political system.

To contact the reporter on this story: Elizabeth Konstantinova in Sofia at ekonstantino@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net Paul Abelsky, Eddie Buckle

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