TRANSPORT MINISTRY REVISITS PRIVATISATION PLANS

Strategic partners eyed for state-owned airport and cargo firm

THE CHANGE of drivers at the wheel of government in July has re-opened the issue of privatisation of several state-owned companies operating in the transportation sector. The cabinet under the previous prime minister, Robert Fico, categorically opposed privatisation of what it called strategic companies. After taking office it cancelled the privatisation of Bratislava Airport and swept aside a proposal to sell a majority stake in the state-owned cargo railway company. Reacting to the failure of these state-owned companies to operate without losses, the cabinet of Iveta Radičová is now re-opening the door to strategic partners to be players in these two state-owned companies.

THE CHANGE of drivers at the wheel of government in July has re-opened the issue of privatisation of several state-owned companies operating in the transportation sector. The cabinet under the previous prime minister, Robert Fico, categorically opposed privatisation of what it called strategic companies. After taking office it cancelled the privatisation of Bratislava Airport and swept aside a proposal to sell a majority stake in the state-owned cargo railway company. Reacting to the failure of these state-owned companies to operate without losses, the cabinet of Iveta Radičová is now re-opening the door to strategic partners to be players in these two state-owned companies.

“The Ministry of Transport, Postal Services and Telecommunications realises the need to find a strategic partner for ZSSK Cargo as well as Bratislava Airport,” Ľubomír Tuchscher, the head of public relations at the ministry told The Slovak Spectator. “But we do not want to do this quickly and at any price. We prefer the entry of strategic partners to privatisation. Such a partnership should be mutually beneficial.”

The cabinet of former prime minister Mikuláš Dzurinda started a process to sell a majority stake in ZSSK Cargo in 2005 but did not complete it before the parliamentary elections in 2006. The incoming cabinet headed by Fico terminated the plan.

The Transport Ministry noted that it is aware of the difficult financial situation of both companies and especially of Železničná Spoločnosť Slovakia Cargo (ZSSK Cargo), which last year received an eight-year loan of €166 million from the government because of its financial problems. ZSSK Cargo announced earlier this year that it will be unable to make the initial instalment payment on the loan due in February 2011, according to the SITA newswire. The company closed 2009 with a loss of €126.6 million.

Pavol Ďuriník was named the new general director of ZSSK Cargo in mid September, replacing Matej Augustín, who was removed from his position by Transport Minister Ján Figeľ in July.

“Our foremost goal, especially in the case of ZSSK Cargo, is stabilisation, consolidation and revitalisation,” said Tuchscher. “Only then we can consider the selection of strategic partners.”

ZSSK Cargo attributes its difficult financial and operational situation to a significant drop in cargo transport caused by the economic crisis. It has introduced a four-day work week for all its employees.

“Primarily, it is necessary to consolidate the company; that is the basic task of the new management,” ZSSK Cargo spokesperson Monika Schmidtová told The Slovak Spectator. “Currently, the company management is analysing the situation and only on the basis of those results will it proceed to the question of the potential entry of a strategic partner.”

ZSSK Cargo said that it is already taking tangible steps to reduce its costs, increase revenues and improve its economic performance.

“An example of the first steps is electronic public procurement which our company is already carrying out,” said Schmidtová.



Bratislava Airport



The situation for Letisko M.R.Štefánika – Bratislava Airport – is somewhat different. The airport's shareholders, the Transport Ministry which holds 48 percent of the shares and the National Property Fund with 52 percent, replaced the airport’s entire top management on September 9, naming Maroš Jančula as the chairman of the board of directors to replace Zdeněk Schraml.

According to SITA, Figeľ stated that among the reasons for the wholesale change of managers in top posts was non-transparent decision-making and unsupported preference for certain financial partners and companies. Bratislava Airport reported a loss of €2.7 million in 2009 but the company’s management does not view this as a particularly poor result since three airlines operating at the airport went bankrupt last year.

“In spite of the loss of three airlines, SkyEurope Airlines, Air Slovakia and Seagle Air, which in 2008 made up as much as 55 percent of the total operating revenues of the airport, we recovered relatively quickly, our performance has stabilised and we have again registered an increase in the volume of passengers,” airport spokesperson Dana Madunická told The Slovak Spectator, adding that some other airports had taken six to eight years to recover from similar situations.

Madunická said Bratislava Airport’s management views the decision about the entry of a strategic investor to be a matter for the airport’s shareholders but that it is important to choose the proper kind of partnership as there are several successful models in the world.

"The entry of the strategic partner would in particular mean for the airport additional financial resources being used for the development of services and completion of the necessary infrastructure which we are not able to cover from our own resources," said Madunická.

However, Madunická said Bratislava Airport does not view the 2006 privatisation plan – that would have sold 66 percent of airport shares to the TwoOne consortium consisting of Schwechat airport in Vienna, the Penta private equity group and Raiffeisen Zentralbank of Austria – as very beneficial.


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