IMF does not give up privatization of Moldtelecom

Till the end of September 2008, the Government is to select, in a contest, an advisor to assess the ways of possibly privatizing Moldtelecom, Info-Prim Neo reports. The commitment is envisaged in the Memorandum of Economic and Financial Policies (MEFP) for 2008, after the revision of which, on March 12, the Executive Board of the International Monetary Fund (IMF) decided to disburse a new loan of USD18.6M. The privatization of Moldtelecom is an older condition of the IMF. In October 2002, President Vladimir Voronin promised to sell the company to the Moscow City Telephony Network (MGTS). Yet, already in November of the same year, the Government’s Commission for the privatization of Moldtelecom rejected the financial bid of MGTS. The Russian investor proposed but USD20 million for the right to acquire 51 per cent of the shares of the fixed telephony operator. The Government hoped to gain at least USD60 million from privatizing the fixed telephony monopoly. Yet, the Russian side refused to raise the bid. In order to render it more attractive, in July 2006, the National Agency for Regulation in Telecommunication and Informatics (ANRTI) granted Moldtelecom, against USD8 million, the license to provide mobile telephony services in the CDMA 2000 standard, valid for 15 years. Thus, the fixed telephony operator created the mobile telephony daughter-company Unite. During 2007 and early in 2008, the Government has sold its majority interest in companies with state equity, yet it avoids including huge companies as Moldtelecom or Tutun-CTC into the list, considering individual privatization projects are necessary for those. Later last year, Gheorghe Ursachi, the general director of Moldtelecom SA, assessed that the price of the company should be USD1 billion, as the operator had over 1 million subscribers. Now Moldova is building its relations with the IMF on the basis of the Poverty Reduction and Growth Facility (PRGF.) The loan decided upon on March 12 will raise to USD124.7M the sum of the credits granted under the Facility, approved of on 5 May 2006 for a three-year term.