The Cyprus Telecommunications Authority's early retirement plan that will see staff cuts of 550-600 is expected to save €263 million, board chairman Christos Patsalides said.
Speaking at the House Finance Committee, Patsalides explained that the scheme will bring a gross surplus of €366m and a cost of €103m, leaving an immediate profit of €263m.
The plan will be carried out in three phases, with the retirement of an initial 150 people, followed by 200 in the second phase and 200 more in the third, while the state cost will be recovered in 16 months.
CyTA's executive director Aristos Riris said that the first phase of the plan should have been implemented by the end of 2013 and added that if the House approves the plan, the first 150 people will leave within two to three weeks.
The chairman of the board assured the members of the committee that they will be frequently updated regarding any decisions made by the organisation, noting that "CyTA is an excellent asset of the Cypriot people and we want to maximise its value which will bring multiple benefits".
Some members of the House Finance Committee have expressed their concerns and reservations regarding the release of €9.5m for compensation related to the early retirement scheme.
Chairman of the committee and Diko MP Nikolas Papadopoulos pointed out that CyTA is offering higher compensation that the Electricity Authority (EAC), where compensation reach €52,000 instead of €75,000 offered by CyTA.
In addition, he noted that in the private sector compensation is given for one year whereas the CyTA scheme is compensating retirees for 18 months to two years.
Disy MP Marios Mavrides said that the scheme will burden Cypriot taxpayers as well as the employees that will stay at the organisation, while the plan reduces the state's tax income and harms public interest.
Patsalides explained that similar schemes have been implemented in the banks and assured MPs that there will not be a problem with productivity.