Prime Minister Viktor Orban and E.ON chairman and CEO Johannes Teyssen signed a letter of intent two weeks ago on the sale of wholesaler E.ON Foldgaz Trade and E.ON Foldgaz Storage to state energy company MVM.

Development Ministry state secretary Janos Fonagy will lead a four-member panel formed to oversee the reduction in energy prices. The ministries of economy, development and human resources will each delegate one member to the committee.

Giro-Szasz emphasised that the energy companies will have to bear all of the losses resulting from the cuts, which he said will benefit four million households.

Energy companies have made an annual 20% profit on average in the last 17 years, which has grown to 350% since they took ownership in 1995, Giro-Szasz asserted.

E.ON has lost Ft 40 billion since 2008 on its electricity and gas operations, the company told Nepszabadsag. The German parent company has invested Ft 433 billion in its infrastructure in the last ten years, but new regulations mean it will not have the funds for new capital expenditure.

The centrally imposed cuts may lead to a decline in electricity service and possibly insolvencies in a matter of months, other sources told the newspaper.

Source: Hungary Around the Clock

This news item is one of many published daily by HATC, a premier subscription news service which distributes English-language info about Hungary via email or fax. For a free trial of HATC follow this link and click on 'Free Trial Subscription'.