At the moment, there is no solution that guarantees the long-term sustainable operation of the problems of Aldolviz Zert, although the company had to be recapitalized at the end of last year, and its subscribed capital had to be reduced after a loss of HUF. 1.372 billion in 2020. The subsidy amounting to about six hundred million forints from the state eventually reached the company through the increase of the Asian capital of the municipality of Pikeskapa, but since the amount approved in December according to Magyar Közlöny was registered by the registry court only in April, use can only start later.
According to Zolt Deuce, a company spokesperson
The support received was used for wage settlements in addition to meeting the company’s financial obligations, tax installments and deferred payment obligations.
The company was able to conclude a wage agreement in December 2020, under which wages were settled at 12 percent by October 1.
A retrospective wage adjustment was necessary because the company’s employees were also underpaid in a sectoral comparison, the speaker noted the indicator’s interest. The extent to which this state of affairs has reached is a good indication that the workers’ union at Alvolvveys is ready in front of the Carmelite monastery and the office of Prime Minister Viktor Orban. To clarify, mainly because employees of the company, which employs 1,200 people and is state-owned 28 percent, were excluded from wage development this year, even though unions signed a three-year wage agreement with a total increase of 15 percent over the five state-owned waterworks. The company hopes to reach another agreement within a year of the previous agreement.
The company is still in trouble
While workers’ aspirations for this year’s record inflation are understandable,
The fate of the country’s fourth largest water utility company, serving about 136 owner municipalities, remains uncertain.
In favor of the index, the company vehemently denied the existence of a risk of bankruptcy and stressed that it could also pay bills, general fees and wages to all of its suppliers on time. According to them, the company can safely perform its task even in the current heat wave situation in accordance with operating permits and official regulations. But they also reported it
For a stable and predictable operation, they still need to constantly bridge the gap between sales revenue and costs.
They added that securing the water supply is the responsibility and task of all those involved, not only the service companies but also those exercising responsibility for the supply – state and local governments – as well as the authorities.
This should be understood to mean that fee income, which has remained unchanged since 2013 due to the reduction in overheads, does not cover operating costs at all. In addition to the utility tax burden owed along the pipeline network, which was restructured last year, this is fundamentally inconsistent with the Water Utilities Act 2012, which states that “reasonable fees must be paid to operate a water utility”. Government actions and previous investment burden cause financial difficulties for the company.
The company said that at least recent unforeseen events have not affected the company’s financial position since last year.
Alfoldewese can’t do anything in his purview – they’ve been told the index what they can do to reduce the revenue shortfall. According to their information
The necessary crisis management measures have already been taken, and “no more time can be gained with such measures.”
Anyway, the company has not submitted any other proposal for capital transfer so far.
The deal has begun
They also said that the owners are aware of the company’s problems and negotiations are underway and are working to resolve the issue. To be sure, frantic negotiations are underway. The BIKESCAPA General Assembly The meeting was discussed about the fate of the company in a closed session on June 28. It was announced at a press conference the next day by the mayor and rally groups that the state was negotiating with major landlords and union representatives. For peace highlightedBékéscsaba can only support a solution that does not involve loss of property.
At the moment, it is doubtful that the solution is.
The actors involved see no intention on the part of the state to provide additional capital, and local governments do not have many resources for that.
According to Alvoldeviz, increasing the role of the state has been on the agenda since 2017, which is now possible under an amendment to the law at the beginning of the summer, if the owning municipalities voluntarily start acquiring the water utility assets, that is, the underground pipeline network, for free.
According to the index, the owners of the company that represent the largest share of the municipality’s ownership, such as Békéscsaba, Békés, Gyomaendrőd, Orosháza and Sarkad, have already embarked on this, and are already in the second round of negotiations with the Minister without the portfolio of national assets. According to our information, together with the state, the actors already covering three quarters of the ownership share would like to conduct preliminary consultations on possible solutions before fully informing the smaller settlements. It is not yet known what is the position of the other 130 municipalities in this regard.
All this does not promise to be an easy negotiation either, because one thing in return for securing the supply is an important value, in many cases built partly from the property of the settlements – in Piquescapa, not only by a decision of the General Assembly. An agreement must be reached on the free delivery of a pipeline network built on the border for one billion HUF and not used for four years, but also due to the company’s financial difficulties, the local authorities recently refrained from paying the rent for the pipeline. According to our information, there are settlements who do not wish to enforce this claim through litigation at the present time, as long as the performance of municipal duties is not jeopardized by loss of revenue, but they reserve the right to at least there are municipalities who voted on the declaration requested by ITM, which also includes the above.
By the way, after amending the Law on Free Transfer of Property, the National Assembly of Municipalities started consultations with several ministries – this area has been supervised by several ministries since the abolition of the Ministry of Environment and Water before 2010, including the Ministry. Interior, Innovation and Technology Office of the Minister without Portfolio is also involved in charge of the property. The interest group suggested that municipal water utilities should be compensated for operating losses to the same extent as state-owned water companies, and that an annual renewal fund of HUF 60 billion for ten years would be needed to rebuild the most critical parts of the pipeline network. For now, they are waiting for the government’s reaction.
At Alföldvíz, they believe that all solutions, including the TÖOSZ compensation proposal, will be a solution to the economic situation of the company, as well as to other service providers in the sector, which have not yet received support.
In any case, the company sees a need to make decisions about its future by December 31, 2021.
What happens if water plants become insolvent?
According to the Water Utilities Act, the bankruptcy of a service company in Hungary today cannot cause a supply problem. In such a situation, the Hungarian Energy and Utilities Regulatory Authority must step in and appoint an operator of public interest, who will ensure the continuous supply of water and wastewater to consumers.
(Cover photo: An employee of Alföldvíz Regional Water Utility Service Ltd.) performs post-sedimentation sump setup at the new Gádoros wastewater treatment plant on September 25, 2013. Photo: Tibor Rosta/MTI)