Hungary's political climate and the structural problems dogging national electricity wholesaler MVM mean privatisation before 2007 is unlikely, the prime minister said on Thursday.
MVM needs to separate its power wholesale, system operation and generating functions and establish clearly distinct, transparent divisions before its various activities can be sold on their own, Ferenc Gyurcsany told reporters.
"The system operation and wholesaling (activities) can be sold, but this is not a good time politically," Gyurcsany said.
The government has been under constant fire from opposition parties for its privatisation strategy and this week shelved plans to launch the sale of MVM.
The government is working on a new electricity fee structure for regulated customers which will reflect generation and transportation costs more accurately.
Gyurcsany added that MVM's largest asset, the nuclear power generator Paksi Atomeromu, must remain fully state-owned, especially as its original lifetime comes to an end in 2012 and the government pushes ahead with a 20 year extension of its operations.
Gyurcsany noted that Hungary needs other new generating capacity as well but the government will leave construction to private investors.
German energy giant E.ON recently submitted plans to build an electricity generating plant in Hungary, local media reported.
Source: Reuters
15.04.2005