Central authorities exceed again their authority or governmental contest for the right to practice entrepreneurial activities. Info-Prim Neo analysis

A Government Decision published in the Official Gazette 12 days ago declared the commercial organization IMC Market the winner of the investment contest “Development of the Supermarket Chain in Moldova” (see http://www.info-prim.md/?a=10&nD=2007/10/01&ay=10646 ). Under the decision, new shops of the mentioned company will be opened in Chisinau, Balti and other nine towns of the country. The Government Decision obliges the local public authorities of the given settlements to allocate plots of land to build the stores on within three months. The plots should be allotted under investment contracts or leases negotiated by the local authorities and IMC Market directly. Besides Chisinau and Balti, IMC Market shops will be built in Anenii Noi, Cahul, Comrat, Drochia, Hancesti, Rezina, Ungheni, Soroca, and Orhei. The investment contest for creating the supermarket chain was held under the Government Decision No.112 of 01.02.2007, and the idea of developing a chain of supermarkets was initially stipulated in the Strategy for Supporting Domestic Trade in Moldova for 2007–2009, approved by the Government Decision No.111 of the same day. Though issued practically one after another, it seems that the Decision to organize the investment contest runs counter to certain stipulations of the Strategy and to the present legislation. The analyst Igor Gutan also supports such a viewpoint. Info-Prim Neo asked him to comment on the created situation. [Defiance of the legal norms] The most visible contradiction, Igor Gutan says, is the fact that the Strategy envisages that the supermarket chain will be created in rural areas. The appearance of the municipalities of Chisinau and Balti in the list approved by the Government, where such stores already exist, arouses bewilderment. From this perspective, the Government Decision as well as the object of the investment contest do not have legal coverage. The object of the contest organized by the Government was not the plots of land on which to build the supermarkets. The holding of such a contest would have been reasonable and legal if these plots had been government property. In reality yet, the plots are administered by the local public authorities and only they have the right to make decisions on how to use them according to the law, Igor Gutan says. Probably, when the decision was taken, the authorities counted on the “obedient” administrations of the towns and municipalities that would be ready to carry out any instruction of the Government. But after the last local elections the situation has changed, in particular in Chisinau, Hancesti, Soroca etc. Under such conditions, considering the law and the realities, the Government’s request to the local public authorities to initiate talks over the sale or lease of plots out to the contest winner becomes void. Moreover, in compliance with the law on the principles of urbanism and territorial development, only the local public authorities have the right to decide on the building of a facility on the land administered by them. [The interest is the one that counts] The Government knows the norms cited above, but continues to defy them. Why? In search of explanations we can use the general rule which says that if something is not clear, look for the person for which this is convenient. In such a way, the suspicions that there are certain economic interests promoted through governmental agencies can be added to analysts’ confusion. The explanation can be relevant especially in the case of the municipalities of Balti and Chisinau, where the supermarkets are built under stiff competition between the economic entities with high potential. The involuntary or intentional involvement of the Government in this process would cause serious changes of situation favourable to certain forces on the market and unfavourable to others. The analyst Igor Gutan also speaks of other kind of interests. According to him, through this contest the Government aimed to remove the commercial markets from the zones where it was planned to build supermarkets as well as the traders working there. The intention to eliminate the markets is made officially known in paragraph three of chapter eight of the aforementioned Strategy. Under the strategy approved by the Government, “the unorganized trade, first of all the markets, will disappear as they will not be able to compete with the modern chain (of supermarkets) where the prices will be low and the services of a high quality.” We can say that under such conditions, the object of the investment contest was [the right] to build a supermarket chain, i.e. [the right to practice entrepreneurial activity], which is not forbidden or limited by the law. It is a pity that in a country with a free market economy, the right to set up a business is put up for tender, at very governmental level. Therefore, we should not be surprised at the fact that the investors do not hurry to make investments in Moldova, Igor Gutan reasons. At the same time, the winner is also in an unenviable situation. After so much time and money spent (guarantee for participating in the contest, bank guarantee), the company won nothing. In the created situation, it will have to start again from the beginning and negotiate directly with the local public authorities. But there is no guarantee that the local administrations will decide in the company’s favour. Even if the local authorities wanted supermarkets to appear in their settlements, they could absolutely legally designate another company to implement the given project.