Profitable state companies: the government leaves us with no money to invest

The investment plans of the profitable state-owned companies could be overturned by the decision of the government which requires them to pay 90% of their profits to the state budget, nearly double of what they were paying until now.

Many of the few remaining profitable state owned companies had planned investments and need money to co-finance the European projects that they have accessed, but being required to transfer 90% of their earnings to the state budget, as opposed to 50%, as it was until now, could negatively impact their plans to expand.

This is what the heads of these companies say, who made a profit in their activities, who were taken by surprise by the government"s measure, and complain that no member of the government consulted them on this decision.

"CEC Bank is state owned, I haven"t read this law, so I can"t make any statement", said Radu Graţian Gheţea, its chairman. The managing director of national drug maker "Antibiotice Iaşi", Ioan Nani, said: "The government can make such a decision, but we were not consulted. Of course the measure can have an impact on our investments. We would have needed this profit to implement some of our already planned investments, as well as to co-finance European projects".

However, Ioan Nani says he is optimistic concerning the future projects of "Antibiotice", in the context of announced creation of the National Pharmaceutical Company: "Two weeks ago we had talks about this project and we estimate that they will lead to something concrete by autumn. This company will be built on the structure of "Antibiotice", and as to what concerns its profit, we hope we will be ready to reinvest it, given the importance of the new company".

The deputy managing director of "Transgaz", Ioan Rusu, said: "It is a decision that will be submitted for approval in the general shareholder meeting. Since the state is the majority shareholder, it will most likely go through. It"s basically a done thing, there"s not much we can do about it!".

The representatives of the national gas producer "Romgaz", sent us a statement on the decision of the Government: "The company"s entire profit for 2009 has been donated to the state budget, and the members of the board of directors will discuss the decision of the government in their next sessions". The government has not yet presented an estimate on the amounts it hopes to raise through this decision.