Nafta then and now: Plus ca change...

As mists of confusion continue to swirl around the sale of the Nafta Gbely gas storage firm to a private investor, one fact is becoming steadily more clear: This government is not as different from its predecessor as it claims to be, at least when it comes to transparency.
The original sale of Nafta in 1996 to a businessman close to the government of Vladimír Mečiar was hailed by the then-opposition SDK as the epitome of 'Mečiar-era privatisation methods' - in other words, it was untransparent and it defrauded the public of substantial sums.


The government is about to put Slovak state utilities up for sale. Anyone interested?
illustration: Ján Svrček

As mists of confusion continue to swirl around the sale of the Nafta Gbely gas storage firm to a private investor, one fact is becoming steadily more clear: This government is not as different from its predecessor as it claims to be, at least when it comes to transparency.

The original sale of Nafta in 1996 to a businessman close to the government of Vladimír Mečiar was hailed by the then-opposition SDK as the epitome of 'Mečiar-era privatisation methods' - in other words, it was untransparent and it defrauded the public of substantial sums.

The 1999 sale of Arad, a company which controls Nafta, to IPB-All, a Czech company acting as a mediator for the American energy giant Cinergy, may be seen as the epitome of 'Dzurinda-era privatisation methods' - it was untransparent and may end up costing the state dearly.

In 1996, no one knew who had bought Nafta (it turned out to be Trnava businessman Vladimír Poór, among others), because then-Prime Minister Mečiar refused to reveal the identities of the purchasers. In 1999, we still don't know for sure who owns Nafta - Cinergy says it has no Nafta shares on its accounts, while IPB-All has never shown proof that it actually owns the Nafta shares it claims to have bought from Poór.

No one ever took the fall for the 1996 sale of Nafta for one sixth of its market value. Today, angry cabinet fingers are being pointed at supposedly guilty parties, but it is almost sure that those really responsible for Nafta '99 will again get off scot free.

The cabinet has asked parliament to fire Ľudovít Kaník as president of the FNM privatisation agency and Ladislav Sklenár as his deputy. But many members of cabinet - including Deputy Prime Minister Ivan Mikloš and the members of the Hungarian Party and the Christian Democrats - are saying that Kaník's guilt is far from established.

While Prime Minister Dzurinda claimed last week to have proof of criminal wrongdoing by the FNM top brass, this week he changed his tune entirely, arguing that Kaník and Sklenár bore "political responsibility" for the scandal. And while Economy Minister Ľudovít Černák offered last week to resign and accept political responsibility if Kaník and Sklenár would step down voluntarily, this week he said he had changed his mind after "some reflection." If there is evidence of criminal wrongdoing, why have charges not been laid? If there is no evidence, what was Dzurinda talking about? And if anyone is to take 'political responsibility,' why not Černák, the politician who was heavily involved in Nafta from the beginning, rather than bureaucrats like Kaník and Sklenár?

To make matters considerably worse, some of the 'evidence' that Kaník and his colleagues acted improperly looks very weak indeed. The government claimed on July 7 to have a letter from IPB-All swearing that negotiations with the FNM had been going on for some time, and that the FNM had given the green light to IPB-All's purchase of Arad. On the same day, however, Kaník showed a letter on television from the IPB-All President, which said that no negotiations had taken place between the two sides before the surprise sale of Arad on June 23. So who is lying here? And why?

Unanswered questions and dark suspicions were the hallmarks of Mečiar-era privatisation, just as they have become the leitmotif of tenders for state property under the Dzurinda government. The difference is that privatisers under Mečiar wanted this blanket of secrecy, while would-be buyers these days - the foreign investors shut out by Mečiar - want transparency and fair play. Can anyone imagine Cinergy returning to its US investors and owners and saying "Oh yes, don't you know, we've just acquired a Slovak company from a man who's gone to jail. The government is against the sale, and threatens to change the constitution to get its property back. Several high-ranking state officials have been dismissed over the affair. Any questions?" It would be a PR nightmare for the firm, enough to scare away any respectable investor thinking of acquiring a property from this government.

If this is the best the government can do to erase the bad reputation left by the 1996 Nafta sale - the "theft of the century," as it was termed then - why is it even bothering to amend the Large Scale Privatisation Act and offer state utilities for sale? What price will these firms command from investors after Nafta '99?

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