Bucharest Heat Distributor RADET Might Halt Hot Water Supply Over Debts

RADET’s accounts were frozen two months ago and could not pay its historical debt to suppliers, Popescu said.

RADET was sued by Bucharest’s electric power producer Electrocentrale (ELCEN) for a debt that amounted to RON700 million dating from 1996, Popescu said.

Popescu said that RADET could not pay the bills, and thus had its accounts blocked.

Popescu added economy and finance minister Varujan Vosganian should order ELCEN to lift the sanction, to allow RADET to pay its suppliers.

"It’s a matter of ambition which could be solved in two days, Vosganian holds the key,” Popescu said.

“If the problem is not solved by Jul 23, it will bring discomfort in people’s lives,” he added.

Popescu also said Bucharest general mayor Sorin Oprescu is currently handling the problem.

AMEREB was set up in 2007 to monitor the activities performed by RADET and to come up with solutions to lower energy bills for Bucharest inhabitants.

Romanian Prime Minister Calin Tariceanu said two weeks ago that the government would select an audit firm to analyze ELCEN’s activities, as well as the way heating prices are calculated.

RADET is controlled by the Bucharest mayoralty and supplies heat and hot water for over 600,000 apartments in the city. RADET manages nearly 525 kilometers of heating networks and over 875 kilometers of secondary networks.

Romanian power producer Electrocentrale Bucuresti (ELCEN) sees losses of some RON110 million in the first half of 2008, up 57% compared with RON70 million loss during the same period in 2007.

ELCEN asked Romania’s energy watchdog ANRE repeatedly since 2007 to approve higher heating prices. The producer’s most recent request was submitted at the beginning of the year, but ANRE accepted a 11.2% hike in prices for ELCEN’s thermal power as of July.