Kosovar privatization: A road to nowhere
Privatization and procrastination are inextricably linked in Kosovo. The country desperately needs the revenues that a sell-off of state enterprises would bring but its authorities lack the willpower to execute deals. Elliot Wilson report.
TO THE WEST of Kosovo’s bustling, dusty capital, Pristina, sit two landmarks, each remarkable, each linked to the other in a rather maddening way.
The first is a dystopian piece of urban sprawl proudly described by Pristina’s planning department as the "largest roundabout in the west Balkans", and by everyone else as the capital’s greatest barrier to punctuality. The other is an ageing 800MW coal-fired power plant, Kosovo e Re (KRPP), that fouls the air and dominates the landscape for miles in every direction.
Both are in turn yoked to the country’s startling financial ability to shoot itself in the foot – in this case via the government’s lumbering, half-hearted efforts at privatization.
KRPP should be written into MBA case studies demonstrating how not to privatize precious public assets. A case in point is the tale of RWE, Germany’s second-largest electricity provider.
RWE entered the local market in 2005 bearing goodwill and hard cash. The aim was simple: to invest heavily in energy provision by rebuilding the power plant and linking it to a vast nearby source of brown coal. With 14 billion tonnes, Kosovo boasts the third-largest reserves of lignite in Europe after Germany and Poland.