State energy utility Slovenské Elektrárne (SE) on September 8 gave the controversial Devín Banka the lucrative job of mediating the settlement of Russia's debt to Slovakia, even though the bank still owes the Finance Ministry an unspecified sum in unpaid dues from its previous Russian debt contract.
The selection of Devín Banka was savagely attacked by some members of the governing SDK party, who along with Deputy Prime Minister Ivan Mikloš were concerned about the fairness of the tender used to select the bank. Mikloš himself said at a press conference on September 13 that "I will investigate all possibilities within my power to have this selection cancelled," but conceded that only a court decision could break the contract between the utility and Devín Banka.
Mikloš had already announced in late August that the tender, called on August 11 and originally set to close on August 25, did not give interested parties adequate time to prepare a bid. After he prolonged the tender process, seven other parties besides Devín Banka presented bids - state banks Eximbanka and VÚB, Omnia, Castor&Polluz, System Consulting Rt. A, Jindrich Mana and Eugen Ekonka.
Mikloš also criticised the fact that the tender conditions were kept secret - a condition that led corruption watchdog Transparency International Slovakia to refuse to oversee the selection process.
After the announcement of Devín Banka's victory, a squabble over who had been in charge erupted betweern Mikloš and Economy Minister Ľudovít Černák.
Mikloš showed the press a letter he had sent to Černák dated August 30, in which he alerted the Economy Minister of his dissatisfaction with the tender rules. But Černák told the public after the selection of Devín Banka that responsibility for the matter had not been his but that of the Deputy PM. Mikloš, however, replied that the cabinet had decreed otherwise, and accused Černák publicly of making "crooked" allegations to duck responsibility.
"I regard the statements of Economy Minister Ľudovít Černák, and his attempt to shift responsibility onto me for the non-transparent tender to choose a mediator for the settlement of the Russian debt... as an outrage," Mikloš said.
Černák, for his part, said on Markíza TV on September 12 that the brevity of the tender was justified given Russia's turbulent political scene. Slovakia had to move quickly to secure a deal on debt settlement, he said, before the political guard changed and such a deal became impossible. "I personally think that the political situation in Russia can change from day to day, which would mean we get nothing," he said.
Černák also blamed the Finance Ministry for having taken three months to reach a debt settlement deal with Slovenské Elektrárne, saying that if he had held a long tender, the calendar year would have expired before the utility had settled the portion of the debt scheduled for 1999. "I never claimed this tender was transparent," he said. "This tender was under the pressure of time."
Mikloš, however, said he did not understand the urgency shown by SE in announcing the tender. He said that Russia has not even signed the necessary contracts with Slovakia to enable the settling of the debt as desired by the Finance Ministry.
As debt mediator, Devín Banka will try to secure the export of goods worth $150 million from Russia to Slovakia between 1999 and 2001. The value of the goods will be deducted from what Russia owes Slovakia from the Soviet era, now estimated at about $1.2 billion. Based on the agreement between the Slovak Finance Ministry and Slovenské Elektrárne, the settlement of the debt is to be secured by the import of power, nuclear fuel and black coal, and the export of spent nuclear fuel.
Devín Banka is currently negotiating an out-of-court settlement with the Finance Ministry on a reported 10 billion crowns it owes the state in unpaid arrears from its previous debt contract, awarded by the Mečiar government. Černák said on September 7, the day before the bank was awarded the contract, that if the arrears were not paid, the new debt settlement contract could be broken.
From press reports
20. Sep 1999 at 0:00 | Tom Nicholson