Companies run by Chisinau administration cause damage of billions to local budget

Chisinau’s public property register includes 99 municipal companies and public institutions with social capital. Fifteen of them are joint stock companies in which the Chisinau Municipal Council owns holdings. The total net property of the municipality of Chisinau shows a negative value as a large part of the companies work at a loss, the head of the Accounting and Economic Analysis Division Eugenia Ciumac has told Info-Prim Neo. The losses caused by the companies run by the local public administration exceed several billion lei. Termocom SA has the largest debts. On January 1 this year, the value of the net assets of the heat supplier was -1.1 billion lei. The Economic Court declared Termocom insolvent and it is managed by the Creditors’ Council. “Even if the heat supplier has been under reorganization for several years, the company’s economic and financial situation has worsened,” said Eugenia Ciumac. “Termocom SA caused about 1.3 billion lei or 69% of the total losses sustained by Chisinau.” Though the heat supplier sustained considerable losses for several years in a row – about 130 million lei a year – in 2007 it had a profit of 34.4 million lei after the municipal authorities allocated money from the local budget for covering the difference in the heating charges. The water supplier Apa-Canal Chisinau, which is 100% owned by the Chisinau administration, is also in a critical situation. The supplier suffered uncovered losses of 157.7 million lei, 53.6 million of which last year. According to Eugenia Ciumac, the Chisinau budget has been also seriously affected by Speranta Unic SA, whose losses total 3.4 million lei. “In 2007, this joint stock company made a profit of 1.7 million lei after its debt of 1 million lei representing state social insurance contributions to the National Social Insurance House and the overdue taxes of about 1.6 million lei paid into the state budget were cancelled. But in 2008, it ran up new debts of 844,000 lei,” Eugenia Ciumac said. The economic and financial monitoring of the municipal companies shows the same negative values. Most of the losses are caused by the companies that provide transportation services. The losses of the Trolleybus Company and the Bus Company came to 18 million lei and 15.9 million lei respectively. “The profitability of these companies has been nil for many years,” Eugenia Ciumac said. “The negative value of the gross profit shows that the prices of the services provided by them cannot cover at least the direct consumption of the companies, not speaking about the costs. The Chisinau Municipal Council should assess their economic and financial activity more thoroughly and take a decision so that these companies do not go bankrupt.”