21 Jan 2002 – The Czech Republic’s Finance Minister Jiri Rusnok ruled the sale of a majority interest in the state utility CEZ prior to the country’s forthcoming elections in June. It was also reported that the possibility of a direct sale still existed and that Electricité de France was the frontrunner in such a deal.

“I suppose we won’t (manage) to sell CEZ before the (current government’s) term ends,” Rusnok told the CTK news agency in an interview.

Rusnok and Minister of Industry and Trade Miroslav Gregr, who has run the privatization, are to draft a new strategy by Feb. 28 for the sale of the electricity holdings.

The Czech government has been looking to privatize its electricity industry ahead of applying for EU membership. However, the protracted tender process culminated this month with the withdrawal of the sale. The cancellation was blamed on the failure of any bidder to offer the amount required and agree to the strict sale terms.

The rejected bids came from Electricité de France and a consortium made up of Italy’s Enel and Spanish utility Iberdrola.

A report in Friday’s daily Hospodarske Noviny quoted Deputy Trade and Industry Minister Milada Vlasakova as saying that a direct sale is now the only viable way of privatizing the Czech power sector before the June elections.

A 67.6 per cent interest in the power generator CEZ was the main asset in a package, which included the Czech national grid, and stakes in six regional distribution companies. Interest from foreign power companies was muted due to the requirements placed on the sale such as the inclusion of nuclear generating assets, restrictions on onward sale and a brown coal purchase agreement.

Vlasakova said Electricité de France has to date been the only company to show interest in talks with the government about a direct sale of the electricity sector holdings.