ECONOMY MINISTRY RESPONDS TO UNAPPROVED AND ALLEGEDLY DISADVANTAGEOUS PAYMENTS

Consulting contracts criticised

EXCLUSIVE contracts on consultation services for gas distributor Slovenský plynárenský priemysel (SPP), regional power distributor Stredoslovenská energetika (SSE), and the gas storage company Nafta Gbely are under scrutiny after Robert Fico, leader of the opposition party Smer, fiercely criticised what he called lavish payments.
Local media reported last month that SPP had signed three-year deals with its owners, Gaz de France and Germany's Ruhrgas, on consultancy services worth up to Sk400 million (€9.8 million) per year, the news wire TASR reported.

EXCLUSIVE contracts on consultation services for gas distributor Slovenský plynárenský priemysel (SPP), regional power distributor Stredoslovenská energetika (SSE), and the gas storage company Nafta Gbely are under scrutiny after Robert Fico, leader of the opposition party Smer, fiercely criticised what he called lavish payments.

Local media reported last month that SPP had signed three-year deals with its owners, Gaz de France and Germany's Ruhrgas, on consultancy services worth up to Sk400 million (€9.8 million) per year, the news wire TASR reported.

Gaz de France and Ruhrgas have a 49 percent stake in SPP and the state remains the firm's majority shareholder. The consultation contracts, according to which the minority shareholders' mother firms would provide expertise to SPP, were signed without the approval of SPP's supervisory board, where the state has a majority of votes.

SSE and Nafta Gbely are also contracted to receive consultancy services from their owners.

The government is a majority shareholder in all the companies.

"The Economy Ministry wants to see the real state [of the contracts] and thus ordered the state representatives on the supervisory boards of these companies to check the situation," Alexander Škurla, spokesman for Economy Minister Pavol Rusko, told The Slovak Spectator.

Nafta Gbely, according to Rusko, has taken the obligation to pay about Sk100 million (€2.45 million) for consultation services, which is much less than what SPP has put into the pockets of consultants.

The SITA news wire reported that SSE had signed a deal with Electricite de France, according to which the French company would provide consultation services to SSE over three years for Sk734 million (€17.96 million), which is 11 percent of the proceeds from the privatisation of the Slovak regional power distributor.

The maximum annual payment to the French company was set at Sk245 million (€6 million).

However, on January 22 the Economy Ministry announced that it had agreed with Gaz de France and Ruhrgas, on the immediate termination of controversial contracts worth Sk1.2 billion (€29.36 million) so far Sk280 million (€6.85 million) has been paid for the services.

The Slovak daily Pravda wrote on January 23 that new contracts would be drafted by February 10 and that the maximum payments through them would be "several hundred million crowns lower", according to Rusko.

"If the information [on disadvantageous contracts] is confirmed, the [Economy] Ministry will take the necessary steps.

It will negotiate with the investors so that the interests of the state are satisfied, as was the case with SPP," said Škurla.

However, Finance Minister Ivan Mikloš explained that the problem is not that foreign shareholders want to pay themselves for consultations.

The sticking point is that not only the boards of directors but also the supervisory boards, where the state holds a majority, must approve payments between interconnected entities.

The supervisory boards did not approve the payments, Mikloš added.

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