Electrabel monopoly in jeopardy over SNCB prices

20 August 2004

BRUSSELS – Electrabel SA’s monopoly in the Belgian electricity market appears to be under threat after a minister ordered one of its industrial clients to shop around for another supplier, news reports said Friday.

Public Enterprise Minister Johan Vande Lanotte critised Electrabel after the annual bill for Belgian railway operator SNCB ballooned by EUR 13 million in a single year.

In 2002, the bill was EUR 80 million, climbing to EUR 93 million just one year later.
Vande Lanotte has now told SNCB to find another supplier.

“Electrabel has been abusing its monopoly by raising prices so much. As the market is now liberalised, I recommend that SNCB changes supplier as this will introduce more competition to the sector,” he told Belgian daily Le Soir.

The minister also made clear he would not accept a price hike for rail tickets to compensate for electricity costs.

However, the rail company will have to continue suffering the high costs until its contract with Electrabel runs out in 2005.

Vande Lanotte’s outburst comes on the back of a disagreement with SNCB chief Karel Vinck over ticket prices.

Vinck announced on 16 July that he wanted to raise prices for train fares because of the increased electricity costs, but Vande Lanotte rejected the move.

“It is not normal that electricity prices should remain so high in Belgium when the market has been liberalised,” he argued.

Together with Energy Minister Marc Verwilghen, he has asked SNCB to open a call for tenders and to introduce a system that would supply the railways with thermal energy.

Critics say, however, that it would take two years to open up such a central supply of vapour gas energy.

Electrabel said that the prices had shot up because of spiralling energy costs and increased consumption by the rail company.

A company spokesman told La Libre Belgique that the firm would consider Vande Lotte’s suggestion but that no decision had yet been taken.

Subject: Belgian news