Chisinau Municipal Council approves to conclude a credit agreement for paying debts to BERD

The Chisinau Municipal Council approved Tuesday November 7 to contract a credit from “Victoriabank” worth 20 mln lei for purchasing shares issued by “Apa-Canal Chisinau” JSC (ACC). Thus, CMC has subscribed to the additional issuance initiated by ACC Council totaling 200 thousand ordinary, nominative shares, with the nominal share of one hundred lei. CMC shares were justified by the necessity to reimburse the annual installment of 21.5 mln lei from the debt of 180 mln, which is to be repaid by the end of 2014 to the European Bank for Reconstruction and Development (EBRD). The unaffiliated councilor Ilia Bagdasarov told the sitting that the subscription to the enterprise’s shares is actuality a taking over by CMC of the enterprise’s debts towards EBRD, a situation generated by the lack of CMC’s political will to approve tariff increases. The examination of the given item started with discussions about the financial-economic situation of ACC, which takes a turn for the worse year by year and makes the enterprise going bankrupt. Only in the first half of the current year the enterprise registered losses totaling 34 mln lei, the incomes from the provided services comprising 140.8 mln lei, while the expenses – 168.5 mln lei. The total debts of the consumers, according to the data from 1 July 2006, were amounting to 271.6 mln lei, by 3.4 mln lei lower than the total value of the enterprise’s credit obligations. Also because of not adjusting the tariffs of water, as of 2001, the enterprise endured losses of 532.8 mln lei. Head of the management Council of ACC, Mihai Severovan, stated that CMC can not approve tariff increases at present, as the new tariff of 8.73 lei, calculated by the National Agency for Energy Regulation (ANRE) was not coordinated, according to the provisions of the legislation, with the Agency for Construction and Territorial Development (ACTD). He asserts that this item’s tergiversation takes place because of the ACTD. A number of councilors proposed different solutions to the enterprise’s financial-economic situation. Some of them suggested the CMC or City Hall to address the Parliament in an attempt to hasten the approval of amendments to the legislation in energy that would allow the approval of the tariffs of water and sewerage by ANRE. Independent councilor Igor Crapivca proposed CMC to buy the debts that Thermal Electric Power Plants (CET), “Termocom” and certain municipal enterprises have towards the water supplier. ACC director Constantin Becciev said that this method is used in many countries frequently, the debts of certain economic agents being possible to be purchased even at the Stock Exchange. Though he failed to say why, Becciev told reporters that at present ACC can not disconnect or sue the big debtors, and that is why managing the debts by CMC seems to be a good idea. Councilor of “Moldova Noastra” Alliance Oleg Cernei proposed the Council to draw up a methodology of calculating the accounts of water supplies, because even in Romania, data from the meters of the apartments are not definitive when calculating the water consumption, taking into account the data from the meter installed at the block’s entrance. The councilors’ proposals were not put forward for voting. Within ten days, “Apa-Canal Chisinau” is to draw up and present to CMC proposals regarding the redressing of situation at the enterprise. Interim mayor Vasile Ursu said earlier that the water tariffs will not be examined in the close future, as the municipal councilors represent political parties that will not vote for a tariff increase on the eve of the local elections.