Culture Minister Marek Maďarič was right when he said last weekend that "the privatisation of SPP is a scandal that cannot be forgotten". But he failed to mention that the credit belongs to the Fico government and its tireless propagandists.
As parliament began its debate of the government's report on the 2002 sale of the gas utility, we heard yet more bogus 'evidence' of corruption during the privatisation. The report led off with the mistaken assertion that the contract on the sale of the 49 percent stake in SPP should have been accompanied by an official valuation, and the fact that it was not "led to far-reaching legal consequences". In fact, according to the Commercial Code, the worth of assets that are to be sold only has to be set by an official valuator if a company is signing a contract with one of its founders or shareholders, which was not the case in the SPP sale.
Then we were told that Credit Suisse First Boston was selected as the sale advisor even though another bidder, NM Rothschild & Sons, offered a better price. However, Rothschild's 'better' bid of 1 percent of the SPP sales price set a maximum fee of $18 million, meaning that it would not have had a financial incentive to achieve the highest possible sales price. By comparison, CSFB's bid meant that the more Slovakia earned on the SPP sale, the more the advisor would earn as well; in the end, its success fee was only $3.7 million higher than Rothschild's would have been. Arguably, the country was better off paying the higher sum to ensure a motivated seller.
Perhaps the most serious charge the report made was that the winning consortium knew it was alone in the bidding before submitting its offer, and used that knowledge to offer a low price. The 'evidence' presented for this claim is that another potential bidder, Williams, sent a letter excusing itself from the tender to the Privatisation Ministry a day before the bids were due. By its size, the report claimed, the letter was clearly not a bid; "this information unquestionably influence the amount that was offered."
The fact is that until the close of bids at 15:00 on February 28, 2002, the Ruhrgas-GDF consortium could not rule out that both Total Fina Elf and Williams were still in the game. Nor did PM Fico's claim at a January 9 press conference prove that the consortium had insider information: "the purchase price was written in by hand, and looked to have been whited out several times, because they knew they were alone [in the tender], so they played with the price". It is in fact standard procedure for bidders in such tenders to write in their bids at the last moment, to prevent industrial espionage.
There were more misleading and unfounded statements in the SPP report than can be refuted in a single newspaper article. But suffice it to say this: If the Fico government has evidence of wrongdoing in the country's largest-ever privatisation, it should leave it with the police. If it does not, it should let this 'scandal' die a decent death. There are plenty of more deserving candidates awaiting their moments in the spotlight.
4. Feb 2008 at 0:00 | Commentary by Tom Nicholson