(MINA-BUSINESS) – Interview with the Chairman of the CGES Board of Directors
Representatives of the Montenegrin Electricity Transmission System (CGES) expect a positive business result for last year, although the company, they said, faced several serious challenges which are not part of its usual annual activities.
Chairman of the CGES Board of Directors, Dragan Laketić, Chairman of the CGES Board of Directors, said that when it comes to challenges, he primarily thinks of preparing the application for the approval of the regulated revenue for the next three-year period, on the basis of which the Energy Regulatory Agency (ERA) made a decision on CGES's allowed revenue.
"That decision largely determines the business potential of CGES for the next three years," Laketić said in an interview with the Mina-business agency.
He stated that the company had expected higher revenue permitted by regulators, so that they could service all their obligations, which are, for the most part, a result of strong investment activities.
"The total value of investments realised in the last seven years, since CGES has been operating as an independent business entity, amounts to an impressive 112 million EUR for us," added Laketić.
He said that the company is satisfied with the implementation of the investment plan, which reached a record amount of 30 million EUR last year.
Laketić specifically mentioned the completion and commissioning of the 110/35 kilovolt (kV) Kotor substation and the 110 kV Tivat–Kotor transmission line, which has provided consumers from the wider area of the city of Kotor with a significantly more reliable electricity supply.
We have also completed the 110/10 kV Nikšić 2 substation and the 110 kV cable which connects this substation to the transmission network. It is important to note that we built these facilities following the best European practice in the construction of similar facilities, and the technical solutions applied have a minimal negative impact on the environment and people, which was one of our main goals," said Laketić.
The value of investments in Nikšić and Kotor, which were of a multi-year nature, was EUR 17.5 million.
"I expect a positive business result at the end of last year, which will represent a continuation of achieving positive business results since CGES has been operating as an independent business entity," announced Laketić.
He added that the company is dissatisfied with the slow resolution of a very high level of receivables from the largest users of the transmission network and at the same time CGES's most important partners.
"The quality of that partnership, which has been impaired for too long, not only affects the performance of the companies themselves, but is also crucial for the successful functioning of Montenegro's electricity system and the entire Montenegrin economy," believes Laketić.
He said that CGES is an investment-oriented company and that they will try to maintain that image this year as well.
The focus will be on continuing the implementation of the undersea connection project with Italy, where work on the ground will be intensified, so we will have one large construction site from the coast to Pljevlja. We will also be working on a number of, so to speak, smaller projects concerning the reconstruction of transmission network facilities and their preparation for a more technically advanced and efficient method of real-time management," explained Laketić.
The value of the investment plan for this year is just over 40 million EUR.
"The financing of the investment projects is planned from existing loans, grant funds that the state of Montenegro, i.e. CGES, received from the European Union (EU) within the framework of the Berlin Process, as well as, to a lesser extent, from its own funds. New borrowing this year is planned for the energy infrastructure project on the Luštica Peninsula," said Laketić.
Speaking about the project to connect Montenegro and Italy with a submarine cable, Laketić stated that over the past year, work has been intensified on the construction of the associated network infrastructure, namely the part of the submarine interconnection project with Italy for which CGES is responsible.
Also, our partners from Terna have laid a section of the cable from the Montenegrin coast, 157 kilometres long. In the first half of this year, the completion of the Lastva substation is planned, and by the end of the year, the completion of the majority of work on the Lastva–Čevo transmission line, as well as a significant portion of the work on the Čevo–Pljevlja transmission line," Laketić specified.
He added that investment projects are the top priority for CGES, so the company will continue with the intensive implementation of the subsea interconnector project with Italy, as well as other investment projects.
"We want our activities, particularly our investment activities, for which we have received clear institutional support, to be accepted on a wider social level, and in that sense we are ready and open to continue the public dialogue in order to find a compromise between the necessity of building transmission network facilities and protecting the interests of the stakeholders," said Laketić.
He stated that the transmission network in Montenegro is part of the technically integrated European transmission network and must be developed and maintained in accordance with the operational safety criteria prescribed at the European level.
"Given the high level of investment activity and the resulting obligations, it is essential to maintain the company's financial stability, which will be very difficult without resolving the issue of our receivables," believes Laketić.
Institutional support from all stakeholders is, he concluded, once again an essential prerequisite for success, particularly given the complexity and specificity of the problem being addressed.