THE HEAD OF THE OPSPI: Over 36 candidates for the Board of Directors of Hidroelectrica

The Ministry of the Economy has not halted the process for the selection of the professional managers for Hidroelectrica, even though the company entered insolvency, said Remus Vulpescu, the head of the Office For The State's Interests and Industrial Privatization (OPSPI) and the special receiver of the company. The members of the Board of Directors (CA) will be selected by Adecco, and the CEO will be selected by Egon Zehnder.

Mr. Vulpescu said: "So far, we have 36 resumes and we are waiting until the end of the week (ed. note: until today) to collect some more. There are very few foreigners and many Romanians, including the current members of the management. Egon Zehnder will also help us select the members of the Board of Directors because we need to make sure that the company is functional.

The members of the management must be able to work together, to be compatible".

The head of the OPSPI also mentioned that the heads of departments of the state owned must be selected using the same principle of good corporate governance, "to make sure there are no more cases of people appointed in management positions because they are somebody's godson, or someone else's nephew". He said "Romania has professionals which can make the state owned companies more profitable. They've been kept away and they do not feel like coming in and getting involved in the management of state owned companies because those companies are underperforming. They are not doing very badly and I want to take this opportunity to make it understood that there will be no judicial reorganization initiated by us because we are not considering any action of the kind. The listing of state owned companies and the implementation of professional management serve the purpose of making state owned companies more efficient and more transparent".

The candidates selected for the management of Hidroelectrica will have partial access to data and information about the company, which will allow them to set up a receivership plan, within three months. The Ministry of the Economy will select the best, most realistic plan, and the most adequate for ensuring market realities and enduring profitability. This principle will be applied to all the state owned companies.

When asked how the professional management will be protected from the interference of politicians, Remus Vulpescu responded that no government has any reason to prevent companies which bring revenue to the state budget from being economically viable and that the future management contracts will be designed in such a manner as to prevent that from happening: "So far, the members of the government have tried to intervene in the manner in which the non-performing companies were managed. As you all know, there are still management contracts, except they are either badly conceived, or, if they are well conceived, they are not honored".

Hidroelectrica will also see the introduction of private management after it exits insolvency, which Mr. Vulpescu estimates will happen at the end of this year.

Also in various stages of implementation is the selection of private managers for Electrica Furnizare (the selected consultants are Quest Advisors and Egon Zehnder), Oltchim and Complexul Energetic Oltenia (Kienbaum). The head of the OPSPI explained that the selection of private managers for Oltchim was not selected because the privatization of the company is not too advanced.

Yesterday, the Minister of the Economy, Daniel Chiţoiu, announced that even though there is a commitment to implement professional management in four energy companies by the end of June, the government has failed to follow through all the stages of the process. He said, quoted by Agerpres: "By July 25th, we will have professional private management in all the four companies for which we pledged to do so. More than that, yesterday (ed. note: today) we have launched the documentation for the selection of private professional managers for 47 companies controlled by the ministry and their branches and offices".

For a month, the Ministry of the Economy reviewed the balance sheet of these companies, the acquisition procedures and the sale procedures. Daniel Chiţoiu said: "We have found that no matter what we did, even if we changed the politically-appointed management every time a new party came into power, those companies were not becoming any more efficient. Or, the only way to restore the credibility and the predictability before the foreign investors and to increase the efficiency of these national companies, the only way is to bring private professional managers. This would also be a major objective we have committed to in our negotiations with international creditors". He said that in a preliminary stage there is also a goal of introducing private management, and in the second stage, raising the value of these companies and then privatizing the ones which are "scheduled to be sold to strategic investors".