Blackouts blight Kosovo business

By Dominic Laurie
BBC News, Pristina

Sometimes it's a loud roar. Most often, a constant hum. But pretty much everywhere you go in Pristina, the petrol generator reverberates.

It's the soundtrack to business meetings, a meal out, a walk round the neighbourhood. They disrupt the peace, but power cuts are a daily event, and businesses need them just to keep going.

At the upmarket MYC bar in the centre of the city, it's only just gone lunchtime, yet owner Pellumb Bacinozzi has had to run his generator for four hours already.

At $25 (£12) an hour, it's expensive. But without it, he says he'd have to close.

"It's incredible, but I am used to it now. I've had to run one for eight years now," he says. "It becomes a part of us, this noise and everything."

Hospital shutdown

Sometimes shortages don't just threaten businesses, but lives. A few weeks ago, the power went while several patients were having dialysis at Pristina's hospital. The back-up generator also then failed.

Luckily a desperate situation was soon fixed. But such stories make the energy monopoly Kek one of the most unpopular institutions in Kosovo.

Not just for its poor service, but also because Kosovans question where exactly the $1.5bn spent on its infrastructure has gone. To corrupt officials, some allege.

Kek can supply up to 800 megawatts of electricity through its two coal-fired power stations, as well as some imports. But demand is consistently higher.

Stolen power

Its spokesman, Nezir Sinani, admits they need more capacity. But to build it, they need cash. The problem is, they're short because a lot of their power is siphoned off secretly and stolen.

"Thirty to 40% of what Kek produces and imports from the region, Kek doesn't bill. There are other cases, too, where we send out bills but people still don't pay," he says.

"So Kek can only cover its operational expenditures, whereas it relies on foreign or external investment to run its capital projects."

With 40% of all its electricity stolen, Kek is desperate for the courts' help. But it complains judges do not penalise offenders, while the backlog of 12,000 cases is so big that people feel they will get away with never being punished.

Government help

Will the government help? Deputy Prime Minister Hajredin Kuci says making people pay is vital, but so is compromising on their past debts.

"We are trying to collect the money. We will have special rules for people who are not paying for their electricity," he says.

"We will try to do something about debts too, though, maybe for some people, we will forgive them. We will start a new era. If you are consuming energy, you will pay here."

The government has vague plans to build another coal-fired power plant, but even if building started tomorrow, capacity will still be short for years. Kosovo's chamber of commerce admits it's a tough backdrop to woo investors.

Nickel factory

In Drenas, 30 miles west of Pristina, is one project that has chosen to come. It's FerroNikeli, a nickel mine and processing plant and by far Kosovo's biggest private foreign investment.

When it was bought a few years ago by Kazakh and Israeli investors, wartime damage meant a lot of it was under water. It needed tens of millions of dollars to revive it.

With Kosovo's political future still far from certain, this was risky. But perhaps the biggest risk of all was power supply.

Liquid metal boils in its furnaces at 900C. A shutdown could be disastrous.

So the deal they signed with the UN made sure they were at the front of the queue for power. But that deal runs out in 2011.

FerroNikeli's general manager, Kostas Lamnatos, is worried what will happen then.

"It will be a very big nightmare to find electricity in the area. Unless we find power, business will slow down. What can we do? Import? But that is very expensive," he says.

I put it to him that even that may not be an option, because the cross border transmission lines are unreliable. "Yes, this is also a second problem, but this is Kosovo."

Good salaries

For now, though, the furnaces are whirring. The factory is all go. The local area is one of the poorest in Kosovo, yet 1,000 people are employed there on above-average salaries.

At the end of the production line, we came across workers bundling up 25kg ingots of finished nickel. One of them, Faton Morina, looks 50, but is actually 33. It's not the manual labour that has aged him.

"I was a KLA soldier during the war," he says. "I lost my father, my brother, my uncle and his son. Forty people in our village were killed. Four were soldiers, the rest were civilians."

He says he buried 24 family members himself, then fled the village, only to find the graves dug up when he came back after the war. The bodies are still missing.

After such a traumatic past, he says his new life has helped. "At least when I am here, I am concentrating on my work, and not what happened to me in the past."

For Faton and many others, a good job is more than just paid work. It is a chance to move on. A reliable power supply is just as key for his future as for his company's.