Who will win the debt conflict?

The analysis conducted in the Baku distributing network allows us to speak about the fact that Turkey Barmek did not provide the distributing networks with new technologies as it was stipulated in the contract, Baba Rzayev, Head of BakuElektrikShabaka stated.

The Turkish company provided Azerbaijan with up-to-date technologies in a restricted quantity. Moreover, Barmek delivered outdated and worn out facilities made in 1970-1980s by Turkey, China, and Russia.

The Company used aluminum cables with vinyl isolation. BakiElektrikShabaka prohibited it since 1970s. Barmek installed air lines with outdated and worn out pipes in the centre of Baku City. No up-to-date technology was used during the reconstruction and repair of the electric power substations.

He also said that negative situation was observed with the installation of electric power counters. Electric power counters have been installed only to 68.4% consumers in Baku City, and only 27,2 percent Baku suburbs. At the same time, it should be mentioned that about 30% of consumers have not been registered at all, he said.

To date, the Network has installed 374.000 counters produced in India and China. The technical loses of the Network is estimated at 13-14%.

Actually these looses are much more, since no measures to reduce the loose have been taken at all, said Mr. Rzayev. The situation with the distributing networks is worse than it was five years ago,

Expecting dividends in the form of management over electricity distribution networks, as well as huge investments in this strategic sector, the Azerbaijani government granted Turkish company Barmen in 2002 with right of 25-year management over the Baku and Sumgayit Electricity Distribution Networks. However, it faced with a plenty of problems ranging till the legal proceedings.

Barmek Holding which filed a lawsuit filed at Washington Court for the compensation of investments amount to $291m. The sum also includes the compensation for major asserts and lost profits. Mr. Arabul, Barmek President urges that the Azerbaijan Government should pay in exchange to non-implementation of commitments indicated in the contact, while the consideration of electricity tariffs in 2005-2006, as well as interest n other payments for 4 years. So far, the company has invested $67.35mln in Azerbaijan.

However, the Government assures that it is necessary to clarify who owes. One question has remained unsettled between the Azerbaijani Government and Barmek Holding in the process of takeover of the assets of Baku and Sumgait Electric Networks from Barmek Holding, This question is linked with the non-collection and non-payment of the debts for the use of the electric power by the subscribers.

Barmek considers that Open Joint-Stock Companies Baku Electric Network and Sumgait Electric Network created by the State should assume the responsibility for non-collected debts. Such a position does not correspond with the contract or business relations, because the key activity of the Company is to carry out the collection of debts and payment for the electric power.

Barmek has two kinds of debts to Azerenerji. The matter is that according to the management contract, in the first stage of the activities, Barmek had the opportunity not to fully pay off the used electric power: in the first year 50%, later 55%, 60%, 75% and fifth year (from 2006) 100%.

The first debt to Azerenerji emerged due to the non-payment of the finance for the purchase of electric power from this year, and the second, collection of debts for the previous years 50%, 45%, 40% and 25%). Paying 50-60% of the finances does not release Barmek from the rest part of debts. After the completion of the defined period, Barmek should pay off the debts through collected finances

The financial problems of Barmek began exactly from 2006, as it paid only 10mln AZN to Azereneji for the electric energy supply.

So, it is dealt with a huge amount. These facts are supported by the documents which will be submitted during the court investigation.

The Court will define who is correct in this dispute. According to the rules of the arbitrary court, each party appoints an arbiter, and these two arbiters, for their parts, choose a third one. The above mentioned process is a usual legal action, and it does not bother us. The Azerbaijani Government is ready to prove its right both in domestic court and in any international one, said the Deputy Economic Development Minister.

The damage inflicted to government by Barmek will be restored. We are going to summarize all unpaid funds for electricity transited to Barmek and we are keen on obtaining all funds, the Azerbaijani Deputy Minister for Economic Development, Mikayil Jabbarov, said.

Irrespective on the Court Sentence, Barmek is unwilling to work further in the Azerbaijani energy sector. At present Turkey is preparing tenders for privatization of electricity networks and after the completion of takeover of Azerbaijani electricity network Barmek plans to participate in these tenders. Mr. Arabul stated that the company plans to use its Azerbaijani experience in Turkey. We plan to use the Azerbaijani personnel in Turkey in our projects. We are keen on attracting young engineers in the process of application of automated systems for calculation of meters, which was established in Azerbaijan, he stressed.

Azerbaijan in its turn has no plans on attracting foreign companies for management over the Baku and Sumgayit electricity distribution networks. The First Prime Minister, Yagub Eyyubov, said that the companies established for management over the networks can fully carry out their work.

Subscribe to Trend in Google News! Subscribe
French ambassador convinced by importance of France-EU-Azerbaijan space co-op
French ambassador convinced by importance of France-EU-Azerbaijan space co-op
Sweden sets new daily COVID-19 case record
Sweden sets new daily COVID-19 case record
Blast in Greek capital damages buildings, one injured
Blast in Greek capital damages buildings, one injured
Loading Bars
Latest
Steps taken by Armenia, Turkey to normalise relations are good news - EP's Turkey rapporteur
Georgian Parliament Speaker meets NATO Deputy SG
New US ambassador to Turkey presents credentials to President Erdogan
Embassy of India in Baku celebrated Republic Day of India on 26th January 2022
Booster dose of vaccine required to prevent severe course of COVID-19 - Azerbaijani doctor
Citizens of two more countries allowed to enter Azerbaijan by air
Health structures in Azerbaijan talk COVID-19 vaccine certificate validity
Uzbekistan reveals total assets and liabilities of its banks for 2021
Uzbek Central Bank notes increase in volume of deposits for 2021
Price indexes of industrial, construction sectors at Uzbek stock exchange fall
Azerbaijan says high infectiousness, short incubation period of Omicron strain lead to infection rate growth
Georgia’s parcel shipping companies talk service tariffs in 2022
Rebalancing India’s Foreign Policy
SOCAR to supply spot pipe gas to Turkey
French ambassador convinced by importance of France-EU-Azerbaijan space co-op
Passengers of all three delayed AZAL flights on Baku-Istanbul route depart to destination airport
Advantages of using modernized floating power units in Kazakh copper project named
Azerbaijan to increase gas supplies to Turkey
Azerbaijan pays special attention to restoration of liberated lands - Permanent Representative to UN
OPEC+ expected to stick to planned March output target increase
Sweden sets new daily COVID-19 case record
Azerbaijan maintains positions in Global Firepower 2022 rating
Israel's Partner Comms gets fibre deal to connect East and West
Turkmen Commodity Exchange discloses data on imports from Azerbaijan
Georgia’s Hualing FIZ works close with Azerbaijani investors - CEO (Exclusive)
Kazakhstan to continue implementing measures to battle inflation
Iran, Azerbaijan negotiating to change truck transportation route to outskirts of Astara city - RMTO
Russia pays priority attention to macroeconomic stability - Vladimir Putin
EU, KfW, AFD to maintain support for Georgia’s energy sector
Azerbaijan shares data on number of vaccinated citizens
Turkmenistan, Afghanistan plan to accelerate work on TAP
Uzbekistan and Pakistan to work on preferential trade agreement
Azerbaijan's credit rating at 'BB+/B' neutral for its Eurobonds - Gazprombank
Azerbaijan confirms 3,192 more COVID-19 cases, 1,259 recoveries
Azerbaijani opposition member spared jail over sex attack on vulnerable woman in UK
Iran announces several economic executive orders
Iran seeks foreign investment for Rasht-Astara Railway Project
10 foreigners among Padma awardees
Uzbek Statistics Committee shares data on imports of electric cars
Road bridge across Astarachay River to be breakthrough in dev't of "North-South" ITC project
Georgia’s commercial banks increase net loans issuance
Kazakhstan cancels launch of methanol & olefin plant in Mangystau
AT&T profit beats estimates on strong streaming growth
Azerbaijan records decrease in loans issued for industry and manufacturing
India better placed to meet challenges: Ram Nath Kovind
Iranian president expresses openness to direct talks with US
Azerbaijan's MFA congratulates India on occasion of India's Republic Day
Azerbaijan's TABIB recommends booster COVID-19 vaccination to strengthen immunity
Azerbaijani defense minister continues official visit to Iran (PHOTO)
No one should doubt that new legislation on media in Azerbaijan will meet modern developments - Azerbaijani Media Dev't Agency
Azerbaijan's Rabitabank discloses net profit for 2021
SOCAR’s production union overfulfills production plan
Armenian PM Pashinyan tests positive for COVID-19
Iran reveals trade turnover with Caspian Sea countries
Hualing FIZ CEO talks new projects launched in 2021 (Exclusive)
SOCAR Carbamide’s revenues grow six-fold
STAR Refinery, Petkim see significant increase in recycling rate
Turkmenistan's Halkbank opens tender for audit
Russian companies submitted 14 applications for participation in restoration of Azerbaijan’s liberated territories - ambassador
SOCAR Turkey talks on prospects for new line of production at Petkim
Baku preparing to host FIG Trampoline Gymnastics World Cup
Uzbekistan notes overall increase in exports within 2021
Ambassador Bocharnikov talks increased number of Russia-Azerbaijan flights
Remains of Armenian soldier found in Azerbaijan’s liberated Jabrayil district
Moscow shares Azerbaijani President Ilham Aliyev's approach, vision on trilateral working group - ambassador
Kazakh project for copper-gold deposit dev't may receive nuclear-powered icebreaker
Ambassador talks expected visits of Russia's businessmen to Azerbaijan
Bank of Georgia allocates funds to local shoemaking company for exporting goods to US
Russian ambassador talks upcoming 20th anniversary meeting of Russia-Azerbaijan intergovernmental commission
Russian ambassador assesses work of LUKOIL in Azerbaijan
Turkmenistan's Turkmenhimiya to buy equipment via tender
Meetings of Azerbaijani, Armenian public figures to contribute to normalization of ties – Russian ambassador
Russian ambassador talks trade-economic cooperation between '3+3' countries (PHOTO)
Turkmenbashi oil refineries extends tender for hydrogen production unit construction
Russian ambassador comments on possibility of Azerbaijan joining EAEU
India Emerges as a Global Actor during the Pandemic Crisis
Russia highly appreciates Azerbaijan's position on normalization of regional situation - ambassador
Uzbek Commodity Exchange announces weekly quotes of commodities for export
Georgia’s Hualing FIZ to sign agreement on area expansion (Exclusive)
S.Korea's daily COVID-19 cases surge as new testing scheme begins
Uzbekistan proposes initiative to ensure free trade
Volume of Russian investments in Azerbaijan unveiled - ambassador
Blast in Greek capital damages buildings, one injured
JV in Kazakhstan to engage electric engine repair services via tender
Kazakhstan’s oil producing company opens tender to remove hazardous drilling waste
Kazakhstan’s vice minister of ecology, head of "Operator ROP" company detained
Turkmenistan launches unified trading platform for entrepreneurs
Azerbaijan discloses districts with highest cotton yield
Power outage in Uzbekistan leads to decrease in gas production
Kazakhstan shares data on Samruk-Kazyna Sovereign Wealth Fund's debt
Axpo Holding places first sustainability-linked bond
Azerbaijani oil prices up
Uzbekneftegaz JSC resumes operation of its enterprises and plants following large-scale blackout
‘Nar’ takes the title of Azerbaijan champion (PHOTO)
Georgia reports new record high COVID-19 cases
Germany to support development of Azerbaijan's private sector
Turkmenistan ready to boost natural gas supplies to China
Uzbekistan's Tashkent Metro resumes operations
Kazakhstan introduces anti-terrorist operation regime in Almaty's district
ITU talks areas of cooperation with Turkmenistan
All news