Privatization of public property in Chisinau might be postponed

Though the Chisinau Municipal Council (CMC) approved the list of companies that will be privatized in 2010 in order to cover the budget deficit, the sale of public property may be postponed for a more stable economic year, consider Chisinau councilors and experts, Info-Prim Neo reports. The Council owns holdings in 15 joint stock companies. In SA “Apa-Canal Chisinau”, it owns 100% of the shares, while in nine companies – more than 50%. The economic crisis and the budget deficit made the local councilors put up a part of the public property for sale. On January 1, 2009, the authorized capital of the 15 economic entities was 766.4 million lei, while the CMC's share was 596.5 million lei. Many of these companies sustain losses of millions of lei a year. Therefore, the municipal councilors decided to stabilize the economic and financial situation and create preconditions for developing the municipality of Chisinau by selling the holdings owned in some of the joint stock companies, including SA Guguta, SA Busines Incubator Alfa, SA Taxi-Service, SA Autocomtrans, SA Speranta-Unic, SA Combinatul Auto Nr. 4 and others. However, many councilors consider that the sale of shares is not timely in a period of crisis. “I do not consider that it is now opportune to sell shares,” said Communist councilor Valery Pavlov. “We'd better use these shares efficiently so as to earn dividends in the future. We must support the companies working at a loss and change the management. We can sell the property at any time.” The Democrat councilors, who form a majority in the Council, consider that it's no use managing the shares in companies that sustain losses. Nevertheless, some of them think they should not hasten the privatization. “We must analyze the situation and determine the costs. Only after we compare them with the costs the previous years, will we be able to decide what shares to sell. Nobody sells shares in a year of crisis. I don't think we should take the risk of selling public property one year before the local elections,” said independent councilor Oleg Cernei. Doctor of Economy Mihai Roscovan, the director of the Business Consulting Institute (BCI) and former municipal councilor, considers the municipal companies must be privatized after carrying out individual assessments. “It is clear that the CMC must sell its holdings in the companies where it cannot influence the decisions made,” he said. “But it is important when and how the minor holdings are sold. Privatization in a year of crisis is not recommended. The Council owns buildings and plots of land whose value is now underestimated. As a rule, such transactions are performed on purpose or to the detriment of the central and local budgets out of ignorance.”