English
• On Friday, the Ponta government was being extremely adamant that it didn't want the privatizations to continue
• Yesterday, Ponta pledged to privatize the state owned companies through the draft of the letter of intent addressed to the IMF
The Ponta government no longer changed the targets assumed by the Ungureanu government when it comes to the privatizations in the energy sector and the private management implemented in companies subordinated to the Ministry of the Economy. When it was in opposition, the USL protested against "privatizations made for free" and raised questions over the opportunity taking the energy companies public.
It would seem that the current government was quickly convinced by the IMF officials that the privatization of the energy companies needs to be achieved, given the radical change of vision.
The text of the motion which brought down the Ungureanu government, USL states that the sale of 15% of Transelectrica through a secondary offering on the Bucharest Stock Exchange did not bring any significant earnings to the stat budget (ed. note: on various occasions, the various USL parliamentarians complained that the amount did not even cover the money needed to modernize an electric power plant) and that there are "numerous question marks because the Ungureanu Government wants to continue the sale of blocks of shares in companies which are extremely important for the national security".
Now that it is in power, the Ponta government has all of a sudden changed its tune and is going ahead with the PDL projects in the energy sector, to which it has committed through the negotiations with the IMF. At least according to the draft of the Letter of Intent agreed with the IMF and obtained yesterday by the BURSA newspaper.
The new executive pledges to accelerate the process for selling on the Bucharest Stock Exchange of minority stakes owned by the state in energy companies. Thus according to the quoted document, the authorities have proposed the beginning of the sale of 15% of the shares of Transgaz at the end of June 2012, the listing of Romgaz in mid-September this year, the listing of Hidroelectrica in mid-October and the listing of Nuclearelectrica at the end of the current year.
The letter also states that by 2013 the current government will launch the call for bids for the sale of the majority stakes in the distribution companies of Electrica, Electrica Furnizare, Electrocentrale Bucureşti as well as in the Oltenia and Hunedoara energy complexes (created through the restructuring of the existing production units this year).
In the document agreed with the IMF, the new executive pledges to solve the situation of Termoelectrica SA, which will enter liquidation in September. The thermal units of Brăila and Galaţi were legally spun off from Termoelectrica to enter the joint ventures created with E.ON and Enel.
• Private managers
The Ponta government also continues the PLD plans to select the private managers for the companies subordinated to the Ministry of the Economy and is proposing as deadlines the end of June for Oltchim, Hidroelectrica and Electrica Furnizare, the end of September-October for Nuclearelectrica, Romgaz and the Oltenia Energy Complex, the end of December for Transgaz.
The draft of the letter of intent also shows the delays which occurred in the privatization process of Cuprumin, where the call for bids failed, but doesn't mention what will happen with the company from now on. There are delays in Oltchim, the privatization of which was postponed until September due to some technical problems (the document does not go into details on that matter).
• The liberalization schedule
The letter also comprises the schedule for the liberalization of the prices of electricity and natural gas. For electricity, the liberalization schedule will be ready at the end of June. At the end of next year, only the population will have a regulated price. The liberalization of the price of electricity for the population will take place gradually, between 2013-2017.
On the natural gas market, prices for non-household consumers will begin rising in December 2012 and by the end of 2014 will end up at the average price of the European Union. Thus, for companies and the industrial consumers, the price of natural gas will be completely liberalized starting on January 1st, 2015 on condition that the difference between the domestic tariff and the European average will not be too big. This means that if the difference in question will be significant, the complete liberalization will be postponed by a year. For the population, the alignment of the prices to the European average will take place between 2013 and the end of 2018.
The quoted document also includes the intention of the government to accelerate the negotiations for obtaining a better price on the natural gas imported from Russia as well as the negotiations for ensuring alternative supply sources. The authorities also have the intention to lift the gas export prohibition because the measure violates the European legislation.
Starting on January, 1st, 2013, OPCOM (the authority of the electricity market) will have a platform for the trading of natural gas. The OPCOM will have a private shareholder structure. This information was published exclusively by BURSA in its edition of April 26th and April 28th.
The Ponta government is also preparing extraordinary measures for the taxation of the windfall profits of oil and gas companies and this year will complete the new royalty system for the 2015-2025 period.
• "The clever boys" in the energy sector
The draft of the letter of intent agreed with the IMF shows that 9 out of the 10 companies which provide electricity which have direct contracts with Hidroelectrica have accepted to negotiate the prices upwards and the reduction of their volumes. But the negotiations will also be extended in May, given the probes launched by the Competition Council and the European Commission. The authorities promise to make these contracts with the clever boys public within 30 days from the completion of the negotiations and pledge to impose the trading through the OPCOM platform of all the amounts of energy available from the producers controlled by the state.
• The private management and the listings on the Bucharest Stock Exchange, the priorities of Minister Chiţoiu
The delivery and receipt procedure of the Ministry of the Economy was not formal, at least when it comes to what the press could see. Lucian Bode, the dismissed minister of the Economy, and Daniel Chiţoiu, the current minister, made brief press statements in front of the Ministry's building in the Victoriei Avenue.
Daniel Chiţoiu thanked Lucian Bode for the brief and effective radiography of the Ministry of the Economy and especially for the honest advice about the interests which certain companies have. He also wanted to mention that his priorities are to honor the commitments which Romania has made towards the international financial institutions as well as the meeting of the government program: "I will continue the program for the implementation of the management by professionals in the state owned companies and I will accelerate the sale through the stock market of the shares of the state owned companies. We will also continue the privatizations of the minority and majority stakes which the state owns in energy companies. On the stock exchange we will put up for sale shares in Transgaz, Romgaz, Hidroelectrica and Nuclearelectrica".
On the privatizations in the energy sector chapter through the sale of majority stakes minister Chiţoiu mentioned the distribution companies of Electrica SA, Electrica Furnizare and the Oltenia and Hunedoara energy complexes.
Mr. Chiţoiu also said that he would stand by his promise to review, in 10 days from taking over the Ministry of the Economy, the bilateral contracts concluded between Hidroelectrica and "the clever boys" in the energy sector. He said he hoped that after the ten days will have elapsed, the problem of the renegotiation of the tariffs and the volumes of these contracts will have been settled once and for all. (A.T.)
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In November 2011, Victor Ponta was saying: We do not want privatizations in the energy sector.
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• Victor Ponta: "I am absolutely convinced that the energy companies need to continue to have a Romanian majority shareholder"
In November, the current prime minister and president of the PSD, Mr. Victor Ponta, on the occasion of the launch of the vision of the USL, said that the former did not agree with the privatizations: "We do not agree with the privatization of the energy companies at the present time. Why? First of all because it was proven and it is still being proven that in Europe, a responsible state, not one led by a corrupt government, but one led by an honest government, maintains control over the energy producers.
I do not want Romania to become a colony in 2012, where nothing is left, where we have to pay taxes even for the air we breathe and the streets that we walk on because they were sold by the current government (...)
"I am absolutely convinced that the companies which produce energy must continue to have their majority stakes under Romanian control, not under that of someone else, and this would allow us to save the jobs and our energy safety for the coming years. It's not the right time to start selling whatever is left for sale. I think that we have already sold too much, not just the current government, but the PSD and PLN governments as well, but without realizing that we would end up in 2009 - 2011 to be led by a Government of traitors, which puts its personal interests above ours".
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• May 5th, 2012: The Victor Ponta government was saying "stop" to privatizations
The Victor Ponta government does not intend to complete the privatizations which the Boc and Ungureanu governments pledged to make this year, according to some political sources. It seems the only privatization which was accepted by the Ponta government was that of CFR Marfă.
In the talks with the officials of the IMF which took place on Friday. May 4, 2012, at the headquarters of the NBR, the Romanian party asked for the postponement of the privatizations in some cases, such as that of CupruMin.
It seems that our delegation was extremely vehement, when it said that it did not want the privatizations to continue, not even in the case of companies for which only minority stakes were put up for sale, such as Hidroelectrica and the Romanian Post Office.
Romanian officials expressed their willingness to sell minority stakes on the stock exchange, but provided the sale was made at the right time, when the state would get the best amount for those state owned companies.
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• Florin Georgescu, about the privatizations: The provisions negotiated by the new government will be honored
The government will comply with all of the provisions concerning the privatizations which will be agreed in the negotiations with the delegation of the IMF, the Finance Minister of the new government, Florin Georgescu, said, when asked whether the Ponta government would stop the privatization process. "All of the negotiated conditions will be honored, once they get updated, as some of them were accomplished, and others weren't and there is a need for new deadlines for them", said Georgescu.
According to the governing program, the USL government plans to "continue the privatization process, especially where and when the privatization brings responsibility and thoughtfulness in managing the economic assets and the resources, but only after the completion of the audit on the activity of the former government and the clarification of the real technical and economic situation of the companies subjected to this process".
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