Our loss-making energy giants versus their profitable giants

Electra and Hidroenergetica, the two giant companies through which Romanian authorities are trying to reorganise the national electricity generation system, starting 2012, when the first regional expansion intentions may materialise, will have to battle foreign groups with a profitability rate as high as 30% and with already developed operations from the US to Russia. "As they lack an investment force comparable with that of other European energy companies, these companies will be able to enter regional competition, not to mention the European one. Therefore, the issue of these companies being created too late does not really exist," believes Mihai Mares, managing partner of Garrigues Romania law firm. According to him, the only strength of this reorganisation plan will be the creation of two companies with a large production capacity, which will also have a greater force to negotiate with private investors in various public-private partnership projects.