Financial Crisis at “Apa Canal Chisinau” makes municipality loan another MDL 20 mln

The Municipal Council of Chisinau (MCC) approved on Thursday, October 12 a decision draft concerning the subscription to the shares of the supplementary issuance initiated by “Apa Canal Chisinau” JSC (ACC). The Council accepted to procure 200,000 ordinary shares estimated at MDL 20 mln. For this money, the General Finance Department (GFD) is to contract a credit. Director of ACC, Constantin Becciev declared that money are needed for paying an installment of the credit accorded by EBRD for renovation of aqueducts and the water supplier is now in a financial crisis caused by the non-majoring of tariffs which produced in just 9 months of the current year a loss of MDL 50 mln. Deputy Mayor Petru Svet declared that the decision adopted by MCC doesn’t have a financial coverage and cannot be executed. According to the deputy mayor, local authorities solicited the Government for financial support, but no response came yet. Responsibles from GFD declared during the meeting that till the end of the current year, MCC is not authorized to approve decisions concerning credits from financial institutions because during the anterior period of the current year, the City Hall already contracted credits of MDL 90.8 mln, reaching the limit established by the present legislation. According to Tatiana Cunetchi, the head of GFD, during 2002-2006, the Mayoralty and the MCC permanently supported the water supplier and took all the measures in order to repay the EBRD credit, contracted by it under the guarantee of the state. According to the contract signed between R. of Moldova Government and BERD, of the total of circa USD 38 mln, Mayoralty of Chisinau had to pay USD 1 mln which on January 1, 2004 were fully paid. Municipal councilors proposed that the situation at CC is discussed in one of the future sessions of the Municipal Council of Chisinau.