IMF: Focus on six state companies after privatizations stumble

The privatization timetable slipped and some auctions failed because they were not well prepared, said International Monetary Fund (IMF) Romanian mission chief Jeffrey Franks during his last visit. As a result, the IMF is now focusing on six companies- Hidroelectrica, Nuclearelectrica, Romgaz, Transgaz and public offers at Tarom and CFR Marfa, .

“We tried to focus the program on companies with a greater economic impact and the greatest impact on attracting investors. But are we selling the crown jewels? Even the crown jewels need investments of millions to keep up with a growing economy. The state has no money and investments must come from private sector,” said Franks. He also suggested that a state company being in profit is not absolute proof it is being well managed. Franks believes many already profitable state assets could make even more money if efficiency was improved, bad contracts renegotiated and corruption rooted out. "Adequate progress wasn't made on the introduction of private managers for state companies. I even heard that there was an attempt to manipulate the process by involving people politically engaged,” said Franks. According to previous agreements with the IMF, Cupru Min and Oltchim companies were to be privatized by the end of April. Economy Minister Daniel Chitoiu said Saturday that privatization for Oltchim has been pushed back to September and another auction for the sale of Cupru Min will be held immediately after the revaluation and environmental consultation. April was a deadline for selling on the stock exchange within the 15 percent of Transgaz but so far only the intermediary has been selected. Currently, three consortia are preparing offers for Romgaz (15 percent share), Tarom (20 percent share) and Hidroelectrica (10 percent of the capital stock). The CFR Marfa privatization has to be completed by late October and the public offer from Tarom has as a deadline at the end of June, according to previous agreements with the IMF. At least 20 percent of Romanian Post is to be taken by a strategic investor by mid this year and the Hidroelectrica listing was originally planned for late October. Ioana Toader, ioana.toader@romania-insider.com