Cab­i­net to dis­cuss ‘New Cyta’ frame­work

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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