Cabinet to discuss ‘New Cyta’ framework
The Cabinet is expected to discuss the framework this week for a new state-owned company that will take over the operations of the semi-government telecoms utility Cyta.
Deputy government spokesman Victor Papadopoulos said after a meeting President Nicos Anastasiades had with Cyta trade union officials on Monday that the new framework calls for the establishment of a limited liability company all of the shares of which will be held by the government.
The talks focused on ensuring that Cyta staff would not lose their jobs and that some would have the option to take a generous early retirement package, stay on with the new company or be absorbed into the already large civil service.
After the framework is passed by the House of Representatives, the new company will undertake all commercial operations currently owned or managed by Cyta, which, as a semi-government organisation (SGO) is controlled by the government only through its board, but regulated by parliament by approving its budget.
The new Cyta, which is likely to be sold off to private investors in accordance with the ‘prior actions’ demanded by the Troika of international lenders, will take over all commercial operations, such as the Cytamobile-Vodafone franchise, the Cytanet Internet provider and other profitmaking subsidiaries, such as Cyta Hellas and Cytaglobal in the UK. It is yet not clear if the infrastructure and network owner will split from the current Cyta and remain a government entity.
The idea to split Cyta into two has been hovering for more than a decade, with the previous two administrations unwilling to clash with the vote-yielding trade unions.
However, the 10 mln euro bailout sought from
the European Commission, the European Central Bank and the IMF imposed on the government to reduce its public sector payroll and privatise as many state service or assets as possible. The government is thus expected to raise about EUR 1.4 bln from the sale or outsourcing of Cyta, power utility EAC, the management of Limassol port and other holdings.
Finance Minister Haris Georgiades, who has spearheaded the privatisation package, said that negotiations will continue with the Joint Advisory Committee tasked with concluding a labour package, but that this process must end by December.
Spokesman Papadopoulos added, however, that the passage of the framework and the conclusion of a labour agreement and redundancy package will be considered during the next Troika review, that affording time to work out the details.
According to a preliminary plan, there will be a transitionary phase of 12 months where Cyta employees will have four choices: to transfer to the new company with private-sector contracts and a share package; to work in the new Cyta with a private sector but remain on the old Cyta workforce, without pay, in order to utilise their public benefits; to take the early retirement package; or, to be seconded to the government.