Treasury picks domestic group for utility, Germans out for now

Treasury Minister Wiesław Kaczmarek said last week that he had picked domestic private sector company El-Dystrybycja over Germany's E.ON consortium for talks on buying the country's top power distribution group. "Today I decided to give exclusive rights to El-Dystrybycja for talks to buy a stake in the G-8 (power distribution) group," Kaczmarek said during a meeting with local authorities in the southern city of Kraków. El-Dystrybycja, controlled by private investor Jan Kulczyk, won final negotiations rights for three weeks, Kaczmarek said. The long-delayed privatization of the so-called G-8 group has spurred controversy between the treasury, which supervises sales of state-owned assets, and Economy Minister Jacek Piechota, who said earlier this month that the German bidder had won the rights.

But Kaczmarek later distanced himself from the economy minister's comments, saying that he had not made any decision on a potential buyer for the northern-based group by then. In early June, the eight-month-old government tackled the issue of the G-8 sale, allowing the treasury to offer a majority stake in the group, which controls 17% of Poland's power distribution market, instead of a small minority stake. The G-8 sale, announced by the previous government, is expected to be one of the last in the fragmented distribution sector, which the current leftist cabinet wants to consolidate into several regional groups before selling to investors. The treasury wants to sell control in the group, which supplies power to 2.6 million customers, with both bids said to be nearing €1.2 billion for a 60% stake. Poland has so far sold only one power distributor, the southern GZE plant, to Sweden's state-owned energy group Vattenfall, Europe's fifth-largest utility. - Reuters