Management of several state companies "will be privatised"

The Ministry of Economy intends to nationalize the management of several state companies under its coordination.

More precisely, the leadership of these companies would be awarded by tender to private companies.

So far the names of the state companies whose leadership would be privatised haven’t been made public.

The Ministry of Economy has under command companies such as Romgaz, Transelectrica, Hidroelectrica or Salrom (The Romanian National Salt Society)
Romania is committed to the preventive agreement with the IMF and the European Commission to restructure the state companies area, in order to reduce losses.

Non-profit companies

Recently, companies such as the CFR and the CNH have accumulated losses of around 1 billion euros each.

Another example is the public Television. According to the activity report submitted last week to the Parliament, the National Television recorded last year a loss of almost 40 million euros.

There are however state companies that record profits, but these are only exceptions, the former Minister of Finance, Ionuţ Popescu states.

"This is the problem, that the state does not have this capacity. This is what it has proved during all these years: that the Romanian state, at least, is unable of such managerial performances."

"And the argument being brought is... for example, they say: ‘But some state companies have profit’. Yes, that is true, some are monopolies and it would be paradoxical not to have any profit."

"The issue is that if you make a comparison – I don’t know, let’s take "Hidroelectrica" for example – with similar companies in din Argentina, in Russia, you can see that, in fact, profitability is extremely low, compared to similar companies", Ionuţ Popescu stated.

Minority stakes,"for sale"

In the preventive agreement with Romania, the IMF and the European Commission haven’t imposed the way in which state companies’ activity should be reorganized.

In the last few months, authorities announced their intention to put up for sale, possibly through the Stock Market, parts of the minority shares packages that the state still owns in various companies.

For those which the state still controls, the idea was they should be privatised, if you can get a good price for them.

However, more recently, both the Minister of Transportation, Anca Boagiu, and Prime Minister Emil Boc declared they were interested rather in the privatisation of the state companies’ managements.

That would be a step forward, provided that the privatisation of the management wouldn’t only be a cosmetic action, according to Ionuţ Popescu, former Minister of Finances.

"No party and unfortunately, neither the public opinion, like the idea of privatisation in energy, because the information has been inoculated in such a manner to convince this be a huge mistake and the state must remain master."

"In my opinion, what happens within these state companies is an enormous waste, an enormous waste of national wealth, and the mere fact that they are under the ownership of the state does not benefit the state", Ionuţ Popescu stated.

Ionuţ Popescu also says the state must avoid the situation where current managers would set up private companies, through which they will continue to remain at the helm of state companies.

The best method, according to former Finance Minister, is that the privatisation of management in major economic companies would be done through international tender where companies renowned in the field would be able to participate.

Translated by: Manuela Stancu,
MA Student, MTTLC, Bucharest University