CyTA pri­vati­sa­tion bill too late


Financial Mirror (Cyprus) - - FRONT PAGE -

The gov­ern­ment pur­pose­fully dragged its feet on the pri­vati­sa­tion of the state-owned telco Cyta, prob­a­bly as­sum­ing that de­lay­ing any de­ci­sion closer to the May par­lia­men­tary elec­tions would se­cure votes in that it would ap­pear to be the ‘saviour’ of the na­tional en­tity and safe­guard the 2,000 jobs.

As a re­sult, it has shot it­self in the foot with any pri­vati­sa­tion deal now per­ma­nently pushed back till af­ter the elec­tions and jeop­ar­dis­ing bring­ing the na­tional fi­nances into a health­ier growth path.

With the Cab­i­net ap­prov­ing on Mon­day the rel­e­vant bill that se­cures salaries, job se­cu­rity, pro­mo­tions and the col­lec­tive labour agree­ment (as if th­ese were never se­cured in the past), the al­legedly pro-busi­ness gov­ern­ment, driven by the po­lit­i­cal am­bi­tions of a hand­ful within the rul­ing DISY party, has now com­pleted its trio of fail­ures, as it has backed down on the pri­vati­sa­tion of Cyta, the power util­ity EAC and the ports author­ity, where work­ers and con­trac­tors have been more than gen­er­ously com­pen­sated. In other words, this ad­min­is­tra­tion is telling new lo­cal and for­eign in­vestors that “we don’t need your money” and that the econ­omy can con­tinue to cope with a pa­thetic growth rate of less than 1% of GDP over the next few years.

In­vestors in the three state-owned and prof­itable as­sets, that were sup­posed to be part of the bailout deal with the Troika of in­ter­na­tional in­vestors, were not only go­ing to pour in 1.8 bln eu­ros over the next four (now al­most two years), but would also in­tro­duce know-how and com­pet­i­tive­ness that would pro­pel the econ­omy into a new era where the state would fo­cus only so­cial pri­or­i­ties, such as health, ed­u­ca­tion, qual­ity of life and se­cu­rity.

In­stead, the gov­ern­ment has made the tragic mis­take of re­main­ing owner/op­er­a­tor of the three na­tional as­sets and will con­tinue to in­ter­vene in the run­ning of th­ese com­pa­nies by ap­point­ing partyaf­fil­i­ated per­sons, in­stead of qual­i­fied man­agers.

It has also sent out an ill-bod­ing mes­sage to any po­ten­tial casino in­vestor that de­spite be­ing an openecon­omy, it may con­sider na­tion­al­i­sa­tion of what­ever con­tracts it farms out to third par­ties, al­most like Venezuela did – and see where that brought them, de­spite the riches of oil rev­enues.

Fi­nally, if safe­guard­ing the work­ers’ rights was the main in­ten­tion of the pri­vati­sa­tion bill, why did it take the gov­ern­ment three whole years to dis­cover the ‘golden share’ prin­ci­ple, al­low­ing it to in­ter­vene for na­tional se­cu­rity rea­sons?

In other words, the soon-to-be es­tab­lished pri­vati­sa­tion com­pany, that will hold as­sets with the aim of find­ing new in­vestors, should bet­ter re­name it­self Na­tional Leas­ing Com­pany, as it seems to agree with the pre­vi­ous com­mu­nist ad­min­is­tra­tion of not let­ting go of costly as­sets, while tax­pay­ers con­tinue to pay for this mess, hope­fully un­til rev­enues from the nat­u­ral gas ex­ports start pour­ing in. Even then, we might be stupid enough to can­cel con­tracts think­ing that we would be bet­ter off drilling, pump­ing and sell­ing the fuel our­selves. Af­ter all, this is Cyprus where ev­ery­thing is pos­si­ble.

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