NICOSIA - Finance Minister Harris Georgiadeson Monday gave assurances over a disputed bill on privatizations of semi governmental organisations (SGOs) saying it does not deprive the employees of their employment and pension rights, nor does it remove powers from the Parliament.
Unions of the employees at the Electricity Authority of Cyprus (EAC), the Cyprus Telecommunications Authority (Cyta) and the Cyprus Ports Authority (CPA) went on strikes last week after a government bill on privatisations plan was approved by the Cabinet and submitted to the Parliament on Thursday.
The approval of the bill for privatizations, aiming at generating state revenue of €1.4 billion by 2018, is considered as prior action for the disbursement of the fourth tranche of Cyprus financial assistance programme.
“The privatistions plan does not undermine workers’ rights. The Government will ally with the workers” Georgiades told the House Finance Committee, which began dscussing the bill on Monday.
The Finance Minister also disagreed with the position that the bill removes the Parliament’s right to have a say on this matter. The bill does not grant the Government more powers, but rather it “recognizes them and guarantees them”, he said.
The Parliament’s role “will be lasting and important” he noted, adding that “each step and change will pass from the Parliament in a way compatible with the Constitution”. According to Georgiades the Constitution does not provide for ratification of the final act of privatisation by the Parliament, that is the sale of shares by the State.
Georgiades warned that in case of major changes to the law, the Government will need to repeat consultations with the Troika of international lenders. He also pointed out that if Cyprus fails to collect the amount required by 2016 from privatizations of SGOs, it will be faced with a financing gap and may need an additional Memorandum to plug it.
The Finance Minister asked the Parliament to approve the bill by the 5th of March in order for Cyprus to fulfill its commitment as provided under the Memorandum, before a Eurogroup meeting scheduled on March 10.
Cyta Chairman Christos Patsalides and EAC Chairman Giorgos Pipis noted that some issues needed to be clarified in order to preserve labour peace. Pipis also said that the bill does not clarify which is the role of the Board of an organisation undergoing privatization. CPA Chairman Alekos Michaelides noted that the Government and the Authority will maintain their right to manage CPA’s assets and therefore national interests are not at stake.
The Cyprus Workers Confederation(SEK) said that privatisations should not be linked with the financial part of the Memorandum and noted that the bill limits the SGOs capability to protect their rights. The Pancyprian Federation of Labour (PEO) said that SGOs have contributed to the State’s economy by €1 billion in recent years and wondered what the State could gain from their privatization.
Both the Cyprus Chamber of Commerce and Industry and the Employers and Industrialists Federation favour privatizations.
According to the bill, the Council of Ministers can issue decrees for the selling of state-owned organisations. Under the bill, the Council will appoint a Ministerial Committee chaired by the Finance Minister and comprising "at least four Ministers" to supervise the procedure and to provide guidance to the Privatisations Unit and the Privatisations Commissioner with a four-year mandate.
Privatisations can be implemented "with methods that are acceptable in normal commercial practices including the sale, transfer, lease or the granting of the right of use, management or exploitation of movable or immovable property."
The bill notes that "proceeds from privatisations will be deposited in state coffers and will emerge from the private sector, either from within or outside the Republic or by other state funds outside the Republic."
The bill follows a detailed road map approved by the Council of Ministers last December covering the privatisation of Cyta and the CPA by the end of 2015 and the selling of EAC by September 2017, as well as divestment in four other organisations.
For Cyta, the plan envisages the participation of its employees either individually or collectively with percentage to be decided by March 2015 and then it will be offered to a strategic investor by the end of 2015.