Oleg Cernei: The rental problem of private education institutions has a predominantly political character

The problem of the Chisinau private education establishments regarding the overdue rent for the space leased from the City Hall has a predominantly political character and is not comparable to the case of the commercial organisations, councillor on behalf of the “Moldova Noastra” Alliance Party in the Chisinau Municipal Council (CMC) Oleg Cernei told Info-Prim Neo. According to the General Division for Economy, Reforms and Patrimonial Relations, the debts of the economic agents leasing out spaces from the City Hall totalled about 6.3 mln lei as of July 1, 2007, with the private education institutions being the largest debtors. Among these institutions are the Real Humanistic University with 1.5 mln lei, the National Theoretic Lyceum with 875,000 lei, the Lyceum of Modern Technologies and Sciences with 609,600 lei etc. Aurelia Porumbescu, head of the Division, told the Agency that the courts ordered the forced levying of the debts from a number of education establishments, but these cannot be recovered because there is not enough money in the accounts of the private institutions. In fact, the reason invoked by the heads of the private education establishments is the lack of money, which is most of the time explained by the carrying out of costly repair of the leased buildings that are mainly former kindergartens. Under the court rulings, there should be levied overdue rents of 5.5 mln lei. [The education process is to blame] According to Oleg Cernei, even if these institutions are private, the Municipal Council cannot act as in the case of other economic agents and cancel the lease because the education process cannot be interrupted. Moreover, he stressed, the central state institutions have also contributed to this situation, when the private institutions lack own spaces. Though many lyceums were impatient to buy the spaces they rented to organise the education process more efficiently, the Government extended until July 1, 2007 the deadline when the private institutions that wanted to have their activity license extended were to have their own space and an authorised fund of 1.5 mln lei. The necessity of reorganising the private institutions appeared when the law on licensing was adopted in December 2004. Prime Minister Vasile Tarlev said then that the Education Code that was being drafted envisaged reforms in the area and when it was approved, the private education institutions would have to comply with the stipulations of the respective law. Since then, the Government has not returned to the problem of own spaces of the Chisinau private institutions. In the first half of last year, the Chisinau authorities examined the possibility of selling 10 buildings to the private education establishments that lease them. On February 28, the councillors definitely rejected such a possibility, saying that the draft decision poses risks and can bring disadvantages to the municipality. The local authorities were concerned that they will irrevocably lose the kindergartens if they sell the rented buildings and will not be able in the future to build new kindergartens if need be. The licenses of these institutions were to be withdrawn by July 1 given the absence of own buildings. In such a way, about 10,000 students would not have had where to study when the new school year had begun. These buildings are used by the International Institute of Management IMI-Nova, the lyceums “Socrate”, “Evrica”, “Petrenco”, “Elitex”, “Prometeu”, “Columna”, the private Moldovan-Turkish Secondary School and the School of Modern Languages. In the municipality of Chisinau there are 34 private education institutions that do not have own buildings. [It is easier with the economic agents] The overdue rent problem of the economic agents is simpler, says Cernei. The Chisinau City Hall has the right to terminate the contract if the economic agent does not settle the debts within 30 days of the warning, which is made by the division that administers the municipal property. Another problem is the fact that the Council in the past years allowed leasing spaces that are in the property of the municipality without clauses that would ban their privatisation. For many times the municipal councillors warned the Council about the irrevocable loss of these spaces, which could be a continuous source of income for the local budget. The former, preponderantly-communist local administration did not take account of the opposition’s warnings. The opposition said that without such a clause in the contract, under the umbrella of the public organisations, many interested persons rent spaces and put them up for sale in two months, earning tens of thousands of euros. [Division for selling municipal patrimony] According to Cernei, the General Division of Economy, Reforms and Patrimonial Relations, which is in charge of the municipal property, during the past years have turned into a division for selling this property. “Instead of having permanent additional resources in the budget from leasing out buildings, we, by the decisions we make, permit their sale,” the councillor said. At the next meeting of the new Council, Cernei intends to ask again for information about the number of spaces rented out in 2006 and of those already privatised. Director of the Business Consulting Institute, Mihai Roscovan, former municipal councillor, told Info-Prim Neo that the CMC has the right to cancel the contracts if there are large debts. Though there are exceptions, for the nongovernmental organisations that cannot pay the rent for a certain period, the new administration must make efforts to administer the municipal patrimony. Furthermore, Roscovan says, the City Hall now leases out spaces at much lower prices than the market ones, or by granting payment concessions, especially to the NGOs. According to the Division, there are 802 contracts for the lease of 355,000 square meters at a yearly rental of 12.6 mln lei overall. Most of the contracts for the lease of buildings from the municipal property, which also make up the largest area rented, are signed in Botanica district. On 1 January 2006, the municipal property register included an area of about 1.7 mln square meters of realty at a residence cost of approximately 1.1 bln lei. The Division for Education, Youth and Sports and the education establishments in Chisinau account for the largest part of the municipal property –about 1.03 mln square meters. They are followed by the Health Division and the healthcare institutions with about 244,000 square meters. According to the same register, the state institutions occupy an area of 1.25 mln square meters.