PARLIAMENT STARTS DEBATING PRIVATISATION OF POWER SUPPLY COMPAMY

ZAGREB, March 1 (Hina) - The Croatian parliament resumed its current session on Friday with a debate on a bill on the privatisation of the power supply public enterprise HEP. Privatisation is expected next year with the placement of shares on the stock market. The government expects the enterprise will be restructured by the end of this year so that privatisation can wrap up in 2003, said Economy Minister Goranko Fizulic. He added the privatisation of HEP would not be used to "patch up holes in the state budget." Restructuring envisages business through several separate companies - the production, transmission, distribution, and supply of electricity. The reform of the power supply sector will enable every consumer to choose the supplier of electricity, which will introduce competition, said Fizulic. The transmission and distribution of electricity, and the independent market operator would be exempt from privatisation and remain state-owned. Parliament would be the body deciding if they were to be privatised. Under the HEP privatisation bill, no individual party may own more than a ten percent interest, which will be ensured through share quotation on the stock market. As long as the state owns a minimum ten percent interest, nobody can acquire, gradually or at once, more than ten percent of the shares without its consent. Fizulic said the basic difference in the privatisation of HEP and the oil public enterprise INA is that a strategic partner is expected for INA, whereas HEP will be privatised through a public offer of shares on the stock market. As in the case of INA, seven percent of HEP shares will be allocated to Croatian war veterans without compensation, while another seven percent will be offered to the employees at favourable conditions. MPs today endorsed a bill on the privatisation of INA, binding the government to submit an estimate of the company's worth before the second parliamentary reading. (hina) ha