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PRIVATISATION AGENCY SHOULD FINISH THE DEALS IT STARTED AND SETTLE CONRACTS IT ADMINISTERS

FNM's end is nigh, almost

THE NATIONAL Privatisation Fund will soon become a part of history. However, the closing of the institution will not happen as soon as the state had originally planned. Since the 1989 Velvet Revolution, the FNM was among the most important establishments because it handles the sale of state property, which is a phenomenon completely unknown to the Communist centralist economy.

THE NATIONAL Privatisation Fund will soon become a part of history. However, the closing of the institution will not happen as soon as the state had originally planned. Since the 1989 Velvet Revolution, the FNM was among the most important establishments because it handles the sale of state property, which is a phenomenon completely unknown to the Communist centralist economy.

The early elections and the decision of Prime Minister Mikuláš Dzurinda's cabinet not to approve new privatisation projects after March 2006 have still left some unfinished business on the national privatisation agency FNM's plate because it still owns shares of companies worth Sk100 billion (€2.67 million).

Thus, the FNM has postponed the ongoing privatisation sales of majority stakes in Slovakia's six biggest heating companies worth about Sk5 billion (€130 million) until October 1. The FNM also halted the sale of the engineering firm DMD Group, as well as minority stakes in several bus companies that could fetch about Sk300 million (€7.9 million).

The fund, which was established by a Czechoslovak federal law passed in 1991, should have originally been killed by the end of 2006, but the government gave the institution an additional six to 12 months, which still might not be the end of the state privatisation agency.

The fund currently owns shares of strategic companies like the power utility Slovenské elektrárne and the gas utility Slovenský Plynárenský Priemysel (SPP).

"The FNM still should complete the privatisation of the heating companies, the state-run bus transporters and the company BMD Group," spokeswoman of the FNM Tatjana Lesajová told The Slovak Spectator.

Investors interested in buying the 51-percent stakes in heating companies in Bratislava, Košice, Trnava, Žilina, Martin and Zvolen hope that the new government will complete the transactions. The sales are expected to fetch Sk4-5 billion (€107.8 - 134.8 million).

The FNM has been uncertain about the fate of the projects it administers since the governmental crisis in early February 2006.

At the beginning of 2006, the state also intended to sell its share in the Bratislava Stock Exchange (BCPB), hoping that the sale could revive the market.

"A tender also should be announced for the BCPB shares because the process of increasing the share capital has been completed and the fund should sell its share," Lesajová told the Spectator.

However, experts say that the next cabinet may have a different opinion on the BCPB's privatisation, especially if the front-running opposition Smer, a social democratic party, comes to power.

FNM representatives say that the privatisation projects might become complicated if the state closes down the institution before it wraps up its deals.

FNM President Jozef Kojda says the privatisation agency should finish the privatisation deals it started.

The FNM also should settle relations concerning contracts it administers. Currently, there are 350 valid contracts under the FNM including 110 contracts with companies undergoing bankruptcy. In 220 contracts, the buyer of a privatised company is fulfilling its duties.

In most cases, these duties have already been met from the financial viewpoint, but the buyer also has other commitments, the meeting of which the FNM must follow.

"There are dozens or even hundreds of court trials that need to be finished along with the collection of certain claims either through the courts or through bankruptcies," Kojda told the press.

One of the important tasks will also be the arrangement of the bonds of the fund.

Kojda says that the FNM currently registers about 35,000 bonds, worth Sk0.5 billion, that have not been paid because the owners have not requested payment yet.

According to Lesajová, the most suitable successor for the FNM agenda would be the Finance Ministry. However, it all will depend on the proceedings of the next government because the legislation has not made it to the agenda of the current government.

The voices that call FNM a bureaucratic burden are becoming louder, and the opinion that its functions should be transferred to other state administration bodies is heard more frequently.

In particular, the Slovak Democratic and Christian Union (SDKÚ) has listed the FNM among institutions that the party considers redundant and a bureaucratic burden.

This year the FNM expects privatisation proceeds of Sk42 billion.

The FNM ended last year with a Sk5.1 billion surplus as opposed to the revised annual plan, which had projected only a slight surplus of Sk7.6 million.

The FNM registered a surplus of Sk1.6 billion (€140 million) within budgetary operations, while the surplus from financial operations amounted to Sk3.5 billion, according to a report by the Finance Ministry.

The most important item within the FNM's revenues was income from dividends, which last year brought the FNM a hefty Sk16.5 billion. Together with interest yields in financial institutions and other revenues, the FNM's total revenues reached Sk16.8 billion, or 100.8 percent of the plan.

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