When Austrian energy giant EVN AG decided to invest in Bulgaria in 2005 by acquiring state-owned electricity providers in the second largest Bulgaria city of Plovdiv, and nearby Stara Zagora, it was confronted by an issue no foreign investor would relish. It was a problem compounded by decades of state negligence towards a self-contained group who were also one of the largest minorities in the country – the Roma.

Crammed in areas popularly known as Roma boroughs, they were one of the groups hardest hit by Bulgaria’s transition to democracy, often used as political footballs by the big parties at elections.

Few politicians had the courage to confront the Roma’s deprived conditions during the period of acute social, economic and political turmoil in the 1990s.
Plovdiv is one of the best examples of how successive governments and local authorities have treated its Roma population packed in several boroughs, the most notorious of which are Stolipinovo and Sheker Mahala.

Legacy
EVN AG came to Plovdiv after the state decided to privatise its electricity distribution companies. The Austrian company, through its Bulgarian subsidiary EVN Bulgaria, found that both Roma boroughs owed millions of leva in unpaid electricity bills. The Roma had simply not paid their electricity bills for years with the state-owned company failing to address the issue for fear of triggering social unrest.

Abandoned after the collapse of the centralised communist economy in which they held down unskilled jobs, many Roma had problems paying their bills, yet continued using electricity.

The Roma grew accustomed to defaulting and blaming the state and society for depriving them of job opportunities. Additionally, other customers who paid their bills complained that the Roma received preferential treatment if the state electricity company threatened to cut their supply but not the Roma’s. The stand-off continued for more than a decade with neither side making progress, hardly a situation appealing to a new investor. In the end the state decided to let private investors tackle the problem.

"We knew about these issues but we were unprepared for the scale of them," EVN Bulgaria chairman Stefan Szyskowitz said.
EVN Bulgaria had the advantage of being a private company operating on the principle that services used must be paid for. "For us the issue was about unreliable customers and not their origin," he said.  

The plan
Asking people to simply pay their bill, however, is not enough when they are pushed to the wall. For EVN Bulgaria, the problem was simple. It had inherited more than 12 million leva in unpaid bills and it had to persuade customers to pay up. To this end the company forged a plan inviting all parties concerned to try to resolve it. Stolipinovo, as the largest
Roma borough in the country, was the acid test and EVN knew it.

"Before the actual start of the project in 2007, we had several months of preparations," Kalina Trifonova, EVN Bulgaria’s senior vice president of corporate and legal affairs, said. The first challenge was that in 2007 Plovdiv was about to hold mayoral elections. "We told people to stop believing politicians and reminded them that their electricity supply depends solely on the distribution company – in this case, EVN Bulgaria," she said.

Gathered together
"Our idea was to unite all the interested parties to achieve results in a joint effort in Stolipinovo. We contacted the other utility companies in the area who were facing similar challenges, including the water supply company and the company providing street lighting. We also invited the city hall and the Roma community, in the form of their leaders," she said.

Next on EVN Bulgaria’s agenda was to make all parties agree to a declaration that they wanted Stolipinovo to achieve a normalised status.   
The company realised that the Roma’s unwillingness to pay was largely based on their distrust of charging methods – yet another legacy EVN Bulgaria had to face. "We pledged to invest in the area so that subscribers could have their own meters to track their electricity consumption. Parallel to this we organised meetings with local community leaders. We held several meetings because different areas have different leaders whom people trust," Trifonova said.

These meetings were a way for both parties to get to know each other and learn mutual trust. For Szyskowitz, who took part in the process, they provided an encouraging portent.

"When I saw the mobile phones on the table I thought that this problem is soluble," he said, recalling that all the Roma representatives had mobiles during meetings. After all, if they were paying their mobile phone bills, could they not also pay electricity bills?

At this early stage of the plan it was all about sending the right signals. One such signal was EVN Bulgaria’s decision to lower the height of the meters, previously so high above the streets that they were inaccessible to subscribers. "By bringing down the meters we showed people we trusted them," he said. Since then there were only two attempts to break into meters in Stolipinovo. As part of the project, EVN Bulgaria organised a demonstration, together with the State Agency for Metrological and Technical Surveillance, to show how the meters worked.

The debt
The 12.2 million leva debt, however, remained the central issue. "We said we could not forget about these debts but we would do everything possible to work together," Trifonova said. "We offered them a six to nine-month grace period after which they had to start covering old bills in monthly payments in addition to their everyday consumption. We agreed that these monthly payments should not burden their family budgets and ruin our project and people agreed," she said.

This disproved the old idea that the Roma were simply unwilling to pay their bills. When confronted with a scheme they found fair and reasonable the problem was resolved.  
The proof is that two years later people in Plovdiv’s Roma areas are paying their everyday consumption and covering their previous debts. "The deal is that, should they fail to cover one of the two payments, their supply will be cut off," Trifonova said. And company investments now make it possible for defaulters to be cut off without affecting their neighbours’ supply, as used to be the case.  

"A month after the project started we had collected more than 80 per cent of electricity bills compared to two to three per cent before. Even we were surprised by what has become a stable trend," Trifonova said.

Both Trifonova and Szyskowitz said that human engagement contributed to the plan’s success.
"We have had a good response from local leaders with whom we have monthly meetings. We also have five well briefed local representatives who handle the situation very well and are always ready to respond to us and the local community whenever a question arises," she said. "They are the link between us and the borough. Whenever we need to say something, we communicate through them and two hours later the news is all over the place. They also provide us with good feedback," she said.

Learning process
After making everyone agree to pay for electricity consumption, just like other subscribers, EVN Bulgaria had to teach people how and where to pay their bills, hardly surprising given that few Roma were used to paying bills. "We had to spread the idea that we have three desks in the area where bills can be paid. We had posters and fliers explaining where these desks were.

We had to teach people to act as clients as well as consumers and informed them about their rights and obligations," Trifonova recalls. "We also started explaining that electricity is no longer a cheap commodity. We showed people how to curb electricity consumption because people were not used to saving," she said.

"We expect to clear old debts in probably five years," Trifonova said, noting that EVN’s focus was not just on recouping its debts. "We want to change how people see themselves as consumers." In this sense Stolipinovo has become a model of EVN’s approach to similar issues in other cities such as Bourgas, Yambol, Kurdjali, Sliven and Straldja. "We use the same model there," Trifonova said.  

Szyskowitz claims the plan worked because many state and NGO institutions involved were helpful. "We built this alliance with other companies and Bulgaria’s representative in the European Commission responsible for consumer protection, Meglena Kouneva, was very supportive," he said. "It was a civil society project and not a case of everyone against the Roma."