A Romanian court has declared a Bucharest public heating distribution company bankrupt. in a ruling that will likely cause concern for residents ahead of the winter months.
The Court of Appeals ruling on Monday put an end to three years of insolvency for the public company and came after recent hot water and heating shortages for tens of thousands of residents.
Bucharest Mayor Gabriela Firea immediately moved to reassure consumers, saying the another public company would take over heating and hot water supplies.
Last weeks, reports said tens of thousands of Bucharest residents hadn’t had hot water for several days due to cracked pipes that Radet had been struggling to fix.
The problem affected people in relatively central areas, and also farther north, close to Bucharest’s office hub, where residents say they have been without water for two months.
Radet accrued debts of 1 billion lei (210 million euros). Last week, Prime Minister Ludovic Orban announced the company’s bankruptcy was imminent.
The capital’s heating problems come from the fact prices have been subsidised for years by the City Hall and the heating network is antiquated and damaged.
But 1.2 million residents in the Romanian capital still rely on the city for heating and hot water. It provides 72% of heating for the capital
A recent study by consulting company Frames said 80% of the company’s pipes are older than 25 years and should have been replaced 10 years ago.
More complications are caused by the fact that Elcen which produces the heat, is government-controlled, while the City Hall runs Radet.
Romanian dictator Nicolae Ceausescu turned down the heating in homes and in public spaces and people shivered in the cold winter months as he wanted to save money and keep Romania debt-free.
Radet manages the biggest heating system in Romania with a 43% market share in the capital. It has 950 kilometers of pipes and 2,900 kilometers of secondary pipes.
