Cyprus & World News

Cyprus sets out privatisation priorities for six SGOs

26 March, 2014

The Cyprus council of ministers has approved a list of decrees that set out the priorities and a timeframe to privatise six of the semi-government organisations, with legislation expected to be in place by the end of the year.
The government had previously announced that the Cyprus Ports Authority would be the first to be privatised or restructured, as part of a wider reform package imposed by the Troika of international lenders. Already, advisors to President Anastasiades have suggested that the port of Limassol should remain a state-owned asset, but would more likely contract-out the management to a privateer over a long-period lease.
The decrees clearly define that the privatisation process for the state-owned telco Cyta, the Cyprus Stock Exchange (CySE) and the Cyprus Forest Industries is the responsibility of the Ministry of Finance. The privatisation of the Electricity Authority of Cyprus (EAC), the State Fairs Authority and the Pancyprian Bakeries are the responsibility of the Ministry of Energy, Commerce, Industry and Tourism.
The government has a minority stake in Cyprus Forest and Pancyprian Bakeries, which it will probably seek to sell outright. The other four are wholly government controlled entities.
According to a decision taken in December, the restructuring or privatisation of the SGOs should begin by late 2015 and conclude by 2018, raising about EUR 1.4 bln for the state. Strikes followed, utilities shut down causing havoc to businesses and distress to consumers, but trade unions eventually quietened down and tried to get the best of the situation, securing guarantees for employees’ pensions funds.
The government has also decided that a ‘privatisation czar’ would oversee the whole process and that a general framework should be in place by the end of May. Following that, independent consultants will be hired to advise the government, while a comprehensive legislative bill should be submitted for approval to parliament by December this year.
The cabinet decision added that the necessary documentation will also be submitted the European Commission and the International Monetary Fund, and later to the European Central Bank, all three comprising the ‘troika’ that are bailing out the Cyprus state to the tune of EUR 10 bln.