A new law increasing the government’s powers over utilities privatized under the previous
administration will hurt Slovakia’s reputation among foreign investors, critics of the move have said.
The law, passed in November, gives the government a veto over the domestic prices set by the SPP gas utility. Under the terms of the privatization deal signed in 2002, the state retained a majority stake in the utility while the foreign investors, E.ON and Gaz de France, were given management control.
However, the current Fico government is unhappy with SPP’s intentions to seek further consumer price hikes, and is expected to use the law to block future rises.
The German Chamber of Commerce, which claims to represent 270 companies employing 70,000 people, said the law unfairly changed the rules of the game. "The new law turns the fundamental and contractually guaranteed decision powers in energy companies upside down. The state, which is the 51-percent owner, will be able to significantly influence price policy of private investors,” the chamber said as quoted by Reuters.
"The new and retroactive change in signed contracts will not be without consequences for investment conditions in Slovakia.”
The Fico government has said that the private investors will continue to manage the company, with four out of seven seats on the board of directors.
25. Dec 2008 at 0:00 | Compiled by Spectator staff from press reports