The audience confirms KEK bought electricity more expensive than auctions

KEK during 2022 for the same amount of electricity purchased has paid higher financial costs compared to what would be paid if initial electricity sales bids were accepted.

According to the latest report ZKA, the Kosovo Energy Corporation (KEK) contrary to recommendations from the Energy Regulatory Office, has reiterated auctions for purchasing electricity at higher prices. As a result, in this case KEK, for the same amount of energy purchased has paid higher costs during 2022.

According to the findings of the National Audition Office (ZKA), KEK, in order to achieve the most favourable prices, has repeated auctions even in cases where offers were valid, even though the ZRE procedure in such cases requires that the auction not be repeated.

“As a result of repeat auctions, we have identified that in two cases, the company had contracted higher prices than prices at initial auctions, as well as in two other cases contracting was at lower prices than prices from initial auctions. This has happened because the company had estimated that the price of initial auctions was not favourable. As a result, the company for the same amount of purchased energy has paid higher costs compared to what would be paid if initial bids” were accepted, the KEK report said.

The audience recommends the KEK Board of Directors provide effective internal procedures to achieve the company's maximum score and eliminate higher costs in the future.

The ZKA report also included the unreasonable interruption of stock prices framework contracts and the signing of new contracts at fixed prices.

According to ZKA, KEK on March 14th 2022, had interrupted with friendly agreements two contracts active for “Fourncing with chloride acid”, for the needs of the Kosova A's and Terminal Kosova B, with the reasoning that, according to suppliers, product prices and transport costs and it was unable to implement these ongoing contracts.

Keeping in mind that the price movement was the previous in the framework contracts we've requested additional clarifications, but we haven't got compelling reason to cut off”, the report says.

The process of interruption and connection that new contracts have been clarified further:

The cut-off contract for the TCA, worth 179,025 for the amount of 1,200 tonnes (149/ton), was tied on November 13, 2020, and had until November 12th, 2022. On the date of the interruption, the realised financial value of the contract was 102,000 or 57% of the contracted value, or 790 tonnes, or 66% of the combined amount”, the ZKA report said.

While, the suspended contract for the Kosova B thermal power plant, worth 181,104 for the amount of 1,001 tonnes (172/ton), was linked on June 22, 2020, and had deadlines until June 02, 2023.

On the date of the interruption, the realised financial value of the contract was 98,772, or 55% of the contracted value, or 764 tonnes or 73% of the amount contracted.

After the contract cuts, the company had twice developed its open procurement activity (April 2022), but the procedures had failed due to the failure to accept responsible bids. Furthermore, the company had twice developed procurement activity using the negotiated procedure (May), and June 2022), but had not negotiated the contract because prices were higher than the projected value”, the ZKA suggested.

However, KEK through negotiated procurement procedures, followed by four contracts for supply of chlorideic acid at fixed prices (not indexed in beps) as follows, the June contract by 295/ton (29,500 per 100 tonnes), the July month contract with 326/ton (32,686 for 100 tonnes), the September contract 720/ton (71.980 for 100 tonnes) and the December contract of December 566ton (14,60 per 25 tonnes).

According to the ZKA, this had happened because the management was hired by the contract cuts operator's demand because of price hikes, even though the price reduction was ahead of the framework contracts.

“Cutting off coronary contracts for chloridenic acid supply had caused disorder in supply, emergency and led to negotiated contracts, which have provided less competition”, the report says.

The signature of contracts after performing jobs and services has been recorded.

“company (KEK) on December 23rd, 2021 had linked the contract to value of 248,650m, titled “TCB” During the execution of this contract, committed experts had estimated that additional work should be carried out and that these jobs were carried out during January 2022 in agreement with the company. For these additional jobs on May 02nd 2022, the company had accepted the bill worth 63,720, while the contract was signed on June 30, 2022, about 6 months after the end of the job”, the report said. .

This contract was named as “The restoration of damaged shovels and vibration measurements and balance in the low-pressure turbine in the B2 unit.

And in another case, according to ZKA, KEK had signed agreements on obtaining physical security services to objects 43 days after receiving services.

The agreement was signed on September 15th, 2022, for obtaining services for the period of August 03th until September 02nd, 2022. It is noteworthy that the company for this service had previously developed procurement procedures that had ended up with complaints in the Procuration Research Organization ( Off.

The ZKA report has resulted in 15 new recommendations for KEK.