Hidroelectrica insolvency, analysed by World Bank

The World Bank examines the context in which it was set in motion the procedure for entry in the insolvency of the company Hidroelectrica.

Chief Economist for Europe and Central Asia of the institution, Sudarshan Canagarajah, says for Radio România Actualități that enters into insolvency proceedings is not necessarily a bad thing, and that is as important to continue the society reform .

The World Bank will probably have more details about this case over a month, when, by the way, is also scheduled in Bucharest the following evaluation mission of the Bank and the International Monetary Fund.

Entrance in the insolvency of Hidroelectrica company was somewhat surprising, and the World Bank still does not have all the necessary information about this case, says Chief Economist on Europe and Central Asia financial institution, Sudarshan Canagarajah.

But what is more important for the World Bank, says Sudarshan Canagarajah is that structural reforms should continue, even if the company goes into insolvency.

"I don't see the insolvency law in itself a bad thing. Important is that the company has an experienced management structure in order to be clearer about income and expenses.

"It must be ensured that they do everything in order to get maximum profit," said Sudarshan Canagarajah.

The representative of the World Bank says that in the case of insolvency, the company's interim leadership must ensure that contracts will be renegotiated, that prices are accurate.

Otherwise, the insolvency proceedings shall not be taken from the very end.

The energy sector is one of the challenges facing Romania currently and will be an important area on which to assess the World Bank will make at the end of July, under the loan agreement with our country.

Romania has committed itself to the World Bank and the International Monetary Fund to sell 10 percent of Hidroelectrica shares.

Trade unions fear layoffs

On Wednesday, Hidroelectrica company unionists began their protests.

They picketed the Ministry of Economy and Hidroelectrica headquarters.

Protests have been announced at the time of application submission to the Court for entry in the insolvency proceedings.

The main concern of the employees is related to possible layoffs.

According to the unions, protests will be followed by penal complaints against the Board of Directors, for abuse and undermining the national economy.

Translated by Denisse-Meda Bucura
MTTLC, Bucharest University