Romanian government to cancel oustanding debts of CET Braşov of over 134 million lei

The Government will cancel over 1.1 billion lei of debts oustanding of 35 thermal plants owned by several mayoralties, a process which is expected to tale at most three months to complete. The government is thereby willing to wipe the amounts that Rulmentul and Tractorul Bra ov owe the Braşov thermal power plant. These debts amount to several billion old lei. This is however subject to citizens paying their overdue heating bills themselves. "It is not fair to have those who pay their heating bills on time, also pay for those who have been using these services for free for years", Mayor George Scripcaru said.

According to data provided by the General Manager of CET Braşov, Florin Cuţitei, over 134 million lei in outstanding debt of CET Bra ov could be cancelled. This represents unpaid instalments of syndicated loans underwritten by the state, taken out in 2004 - 2006, initially valued at USD 40 million. This also includes 24 million lei in debt, "inherited" from Termoelectrica, after the split-off of the latter. The aforementioned amount also includes over 32 million lei in unpaid debts to the consolidated state budget.

CET Braşov owes an additional 60 million lei to GDF Suez Energy Romania, its gas supplier, (most of it in the form of arrears unpaid in the previous years, with accrued interests and default fees, which make up more than half of the unpaid amount), and approximately 25 million lei in coal purchasing invoices, including shipping, which are are short term debts.

The General Shareholder Assembly of CET Braşov met to discuss the proposed layoff of 100 employees, as well as the revision of the revenue and expenses budget following the proposed layoffs, which were scheduled for September 1st. The 100 workers scheduled to be laid off will receive 10 to 14 salaries as part of their severance packages, according to their seniority.

Starting September 1st, CET will only have 700 employees. Florin Cuţitei said that following this decision, the new revenue and expense budget was approved. According to data presented to shareholders, the salary budget for the months of June, July and August amounts to 1.86 million lei a month. Starting with the month of September, the salary expenses will increase by 231,000 lei a month, due to severance package expenses, thus leading to a total salary budget of 2.2 million lei.

Citizens of Braşov connected to the centralized heating system will not have warm water available in the coming period. Last week, Florin Cuţitei had a discussion with the managers of GDF Suez Energy Romania (formerly Distrigaz Sud) to try and convince the latter to resume supplying the CET with methane gas, but negotiations failed.

Mr. Cuţitei said: "It would be appropriate that citizens of Braşov paid their debts outstanding with the CET. Meanwhile we are discussing with the Government the payment in advance of the Q4 subsidies. One thing is certain, we won"t be supplied with natural gas in the near future, so we won"t even be able to ensure warm water to those who pay their bills on time".