Brajković: The Decision on Electricity Purchase is Discrimination Against Aluminij

The Mostar company Aluminij announced on Monday a reduction in production, layoffs, and the filing of a lawsuit due to the decision of the Government of the Federation of Bosnia and Herzegovina, which will require this company to purchase expensive electricity on the world market in 2009.

"Such a government decision is economic chauvinism towards Aluminij d.d. Mostar. This decision clearly discriminates against Aluminij compared to other electricity buyers," states the written statement of Aluminij’s director Mijo Brajković. The Government of the Federation of Bosnia and Herzegovina made a decision last week ordering Aluminij to procure part of the electricity it lacks from the market. In Aluminij’s statement, it is clarified that the public company Elektroprivreda BiH is allowed to export electricity, while at the same time, by the decision of the federal government, Aluminij d.d. Mostar "is forced to import electricity, all within the unified Federation of Bosnia and Herzegovina."

This year, Aluminij has been purchasing imported electricity, which is 63 percent more expensive, while in the last few months, the price of aluminum on the London Stock Exchange has fallen by almost 50 percent, resulting in a revenue decrease for this company of 15 million dollars per month. "Aluminij has found itself in a very difficult situation and will be forced to reduce production in 2009, lay off workers, and file a lawsuit against all relevant institutions that have put Aluminij in an unequal position compared to other electricity consumers in the Federation of Bosnia and Herzegovina," emphasizes Brajković.

It is also claimed that such a policy and the previous behavior of representatives of the federal government call into question the privatization of Aluminij with all negative consequences for current and former employees of Aluminij. Mostar’s Aluminij is 12 percent owned by Šibenik’s TLM, while former workers and the Federation of Bosnia and Herzegovina each hold 44 percent.

Mostar’s Aluminij and the federal government are in a two-year dispute over whether Aluminij should independently procure the quantities of electricity it lacks from the market, which cannot be provided by Elektroprivreda Hrvatske zajednice Herceg-Bosne (EP HZHB), in whose area the Mostar giant operates. The government claims that Aluminij is a qualified buyer that should purchase electricity from imports. At the same time, Aluminij asserts that electricity should not be exported from Elektroprivreda BiH, which, like EP HZHB, is owned by the Federation of Bosnia and Herzegovina, until the needs of domestic companies are met, which is currently not the case. (H)