Mining and Energy Minister Zorana Mihajlovic said on Tuesday that the government can’t keep covering the debts of state-owned companies which is why changes are needed in Srbijagas and the EPS electricity company.

The minister said that the production of electricity and power distribution have to separated in the EPS, adding that the company’s current investments of 600 million Euro are not enough to do that, a ministry press release quoted her as telling the pro-government TV Prva. “The distribution segment creates losses of 250 million Euro a year. We have to fix things to make the EPS a regional player because it is going to build power plants on the Drina river (which separates Serbia from Bosnia-Herzegovina) and has to be strong and powerful but the current value of projects is very low at present,” she said.  

She said that the changes in the EPS do not mean lay-offs or privatization. Serbian opposition leader Marinika Tepic warned on Monday that the announced changes in the EPS and the government decision to create several new companies out of parts of the national electricity producer were an introduction to privatization.

Mihajlovic said that investments in the power distribution network will be set in 2021 to help cut losses. She said that more would have to be invested in protecting the environment, adding that the EPS has invested just 350 million Euro in that to date.

The minister said that Srbijagas also has to separate its transport and gas distribution segments claiming that they are not licensed. “We have formed a working group to help Srbijagas implement changes. Once that is done, we will have clear information on investments, how they are implemented, whether they are profitable and we will have clear business operations and public procurement under the law and in line with international obligations and the companies will get licenses,” she said.