Deregulation

The Romanian government took the first steps towards liberalising its energy sector by adopting an emergency decree on electric and thermal power generation, Reuters reports. The government has claimed it drafted its new regulations in line with EU standards. The decree comes into force with publication of the Official Gazette.

The decree sets the rules for price settlement and defines a natural monopoly in the transmission and distribution of electric and thermal power. It also makes provision for local and foreign investors to operate as energy suppliers to stimulate competition. Last year the Industry minister indicated that reforms would focus on creating an open market by the middle of 2001, with a regulatory body patterned on that operating in the UK.

The emergency decree comes in the wake of International Monetary Fund and World Bank stipulations the resumption of credit to Romania will depend on progress in the restructuring and privatizing of uneconomic industries and the establishment of a free-market based energy sector.

The government has already scrapped Renel, the country’s main energy utility, and set up a new national energy company called Conel which is due to be restructured. This restructuring is expected to involve a massive reduction in manpower. Around 24 000 of a total workforce of 82 300 are expected to face redundancy over the next two years.