ELCEN might discontinue hot water supply to Bucharesters as of October

Sierra Quadrant, the judicial administrator of electricity and heat producer ELCEN Bucharest, will call the creditors' committee to decide whether the company should stop the delivery of heating agent to the public heat distribution corporation RADET starting in October, Sierra Quadrant said in a Wednesday release.

"Following the refusal of the Bucharest City Hall to pay the subsidy to RADET, ELCEN's outstanding claims reached 217.5 million lei, of which 110.3 million past the 90-day due date. Under the given circumstances we inform you that Sierra Quadrant will call ELCEN's creditors' committee, for them to decide if the company should discontinue the supply of heating agent to RADET," the release said.

The judicial administrator said that despite repeated calls for responsibility sent during official meetings, in the official correspondence with the Bucharest City Hall, and in public communication, the City Hall officials remained unfazed by the dramatic situation of the district heating system.

"Cutting the hot water supply in the capital is an extreme measure we have permanently tried to avoid. We delivered the heating agent to RADET, although ELCEN wasn't paid, hoping all the time that Mrs. mayor Gabriela Firea will finally understand that her No. 1 responsibility is the citizens' quality of life. It seems that we were naive! To them, the citizen is just an abstract notion. The only palpable things are donations for churches, TV ads paid from public money for state-owned companies that squander hundreds of millions of lei every month, trips for pensioners and other such actions," said Ovidiu Neacsu, Sierra Quadrant founding partner, as cited in the statement.

He went on to say that ELCEN cannot deliver the heating agent for free and pile up debts.

"After destroying and sending RADET into bankruptcy, ELCEN has become their new target. It's impossible for an already insolvent company to provide free services and amass debts to suppliers, thus depriving creditors of the chance to recover their claims. Therefore, there is a quite high probability that ELCEN will stop the supply of hot water within a maximum period of one month," Neacsu added.

Given that the bankruptcy procedure for RADET has been opened, the fresh debts will add to the existing pool of debts. Without these amounts, ELCEN almost inevitably risks getting into the incapacity to pay for raw materials, materials and even wages.