According to the available information, the mayor of Staré Mesto, Ms Aufrichtová, and the mayor of Ružinov, Mr Chren, were misled and shortly before the elections, apparently unknowingly, mislead their citizens in connection with the heat bills. The misinformation is based on the initiative of the former BAT (Bratislavská teplárenská, a. s.), merged into the company MH Teplárenský holding (MH TH). Although the latter declares current lower prices for heat, it has not told the whole truth about increased costs for all current end-users also in other Bratislava city districts in case it would get the secondary heat distribution systems in the Old Town and in Ružinov into operation.
For the sake of factual correctness of election campaigns as well as the competitive struggle in the energy sector, we therefore call on the state company MH TH not to further mislead the public or the representatives of the municipal districts in Bratislava by unrealistic comparison of heat prices, which evokes the fiction of the most advantageous offer.
Election campaign for a lower price for heat – protection of a particular supplier
The calculations presented by the mayors to deliver savings, calculated on the basis of a misleading offer from BAT (MH TH), are not realistic. There have already been many technical and factual inaccuracies in the statements of the advocates of direct contracting without transparent competition. Overall, they are in favour of MH TH, which they portray as the dominant producer and supplier of heat in Bratislava, and label other entities as ‘useless intermediaries’ or even ‘heat merchants’ with a margin of 19-26 %. We are talking, for example, about multinational corporations that are allegedly ‘lining their pockets at the expense of the population’. We can refute these absurd assertions, on the level of cheap populism, with facts about the market for heat production and supply in Bratislava.
Facts for discussion on thermal energy in Bratislava:
- The state-owned MH TH is not the only heat producer that supplies heat in Bratislava, but most of the heat supply for Ružinov and Staré Mesto is provided by Veolia, Slovnaft, OLO and the ENGIE group itself. Thus, MH TH also purchases heat from various external companies.
- Of the amount of heat supplied by MH TH to Ružinov, their own production represents only about 20%. This is comparable to the share produced for Ružinov by Prvá ružinovská společnost (PRS), a member of the ENGIE Group. Is MH TH then also just a useless intermediary with a margin of 26 %?
- The ENGIE Group is not a reseller, but a producer and distributor with full responsibility for the quality of the heat supply to end users. It produces heat in 455 heat sources (boiler houses) and operates 164 km of distribution pipelines in 20 thermal farms in Slovakia. It sells more than 570 thousand MWh of heat annually.
- The claim that PRS in Ružinov has not invested in repairs and modernisation of secondary distribution lines is also simply a demonstrable lie. The truth is that during the period of the contract in Ružinov the company has already invested more than EUR 9 million in the heat management.
- In the Old Town district, Termming, a member of the ENGIE Group, produces heat at a level of 53% of its sales. It is not a wholesaler, but a producer for end users.
- The supporters of the direct award to the state-owned MH TH refuse to implement the tender, claiming that it takes 4 to 5 years and costs an unnecessary 100 thousand EUR. The fact is that the tender, which alone will bring the best offer to the residents, is feasible in a much shorter time and at a much lower cost. It is only natural that the preferred MH TH can also take part in the tender and thus not only realise its offer, but also compare it with the competitors.
- It is misleading to claim that PRS pays only 1 Euro per year for the lease of distribution lines in Ružinov. Part of the contract with the municipal district from the outset includes non-monetary consideration from PRS, which includes, in addition to the production and supply of heat, also the high-loss activities of the management of municipal premises. The mayor of Ružinov has never objected to the contract or the quality of the service provided in the production and supply of heat. At the same time, the municipality receives EUR 60 000 a year in dividends.
- We consider it extremely dangerous that the de facto monopolisation of the thermal energy sector is being promoted even at the present time, when the direction in the EU is towards openness in the energy sector and a transparent market environment.
- ENGIE is a global energy company with an annual turnover of EUR 57.9 billion (2021). It has been operating in Slovakia for a long time and, unlike the state-owned MH TH (better known as BAT), it has not faced any scandals or allegations of wasteful asset management during that time.
“We strongly oppose unfair labelling. The ENGIE Group is a heat producer and distributor that employs more than 700 people not only in Bratislava, but also throughout Slovakia and invests tens of millions of euros annually in modernisation. ENGIE is one of the world leaders in providing energy services. Všade, kde pôsobíme, konáme v súlade s lokálnou legislatívou a medzinárodnými štandardami,“ says Roman Doupovec, Director of ENGIE Services.
Direct contracts for 20 years as a Slovak standard?
Already today it is clear from the statements (MH TH) that its efforts to control the thermal energy sector by direct assignments are not “only” about Bratislava. There is a risk that Bratislava will become a precedent and the elimination of competitors on the heating market, in favour of the state-owned company MH TH, will spread to other Slovak cities. In the name of transparency, this would be going back decades in the way services worth hundreds of millions of euros are procured.
“We believe that the relevant authorities should also give their opinion on what is currently happening. That is why we have asked the SAO, ÚVO and PMÚ to review this procedure,” concludes Roman Doupovec. Both the SAO and the Ministry of Finance have criticised and guided local governments in the past in connection with the erroneous overuse of special consideration, which mayors are now using to conclude million-dollar contracts without tenders.