TIRANA, Feb. 18 – After failing to sell any key state-owned asset in 2014, government has revised its privatization policy and plans to sell remaining state-owned stakes in strategic enterprises and liquidate loss-making companies.
In its 2015-2017 national economic reform programme approved last January, government says it plans to restructure Albpetrol oil company, the biggest remaining state run company whose privatization in 2012 registered a spectacular failure after a fake Euro 850 million bid by an Albanian-led consortium.
Government says it has set up a working group with technical assistance from the IFC, the World Bank’s private sector lending arm, to study Albpetrol’s restructuring and identify its proper form of sale or a public-private partnership in a bid to increase production, employment and investment in the oil sector.
The government also plans to also sell remaining minority stakes in Albtelecom fixed-line operator and internet provider and ARMO refiner in the 2015-2016 period.
The privatization programme also includes the liquidation of some smaller state-run companies and concession deals for unused assets for a symbolic 1 Euro.
“Companies with a poor financial performance will go into liquidation and some of them will merge. Unused assets of other enterprises with poor economic performance will be offered to foreign and domestic investors to be leased for 1 Euro,” says the 2015-2017 programme.
The government says it plans to sell minority shares in 20 other enterprises in a bid to generate Euro 9.4 million to the state budget.
In its 2016-2018 macroeconomic and fiscal programme, the Albanian government expects privatization revenue to climb to 1.5 billion lek (Euro 10.5 million) in 2015, but expects zero revenues in the 2016-2018 period.
Privatization revenue in 2014 hit a record low for the past decade at only 35 million lek (Euro 250,000) compared to 16.7 billion lek (Euro 117 million) in 2013 when four small and medium-sized hydropower plants were acquired by Turkey’s Kurum.
The Economy and Trade Ministry had previously set a price tag of 34 million Euros for the remaining 16.7 percent state owned stake in Albtelecom. Currently, 76 percent of Albtelecom’s shares are owned by Turkey’s Calik Group which in 2007 bought them for 120 million Euros. The Calik Group is also present in Albania with the Eagle Mobile operator and the BKT bank.
The 14.9 percent minority share in ARMO oil refiner will be offered for 22 million Euros in a tender scheduled for 2015. Albpetrol’s assets are estimated at Euro 95 million.
INSIG, the only remaining state-run insurer whose privatization has failed several times, is not on the privatization list. In some recent changes to the privatization of wholly state-owned INSIG insurer, government has recently placed the company under the Economy Ministry’s management and removed it from the list of strategic privatizations.
The OSHEE distribution operator, whose privatization by Czech giant CEZ proved a failure, has also not been included in the privatization list as government says it is reforming the company to reduce its huge annual losses estimated at Euro 150 million.
In its 2014 Transition Report, London-based EBRD says little progress has occurred in strategic privatisation over the past year. “Although privatisation is largely complete in Albania, there are still a number of companies where significant state shares remain, some of them in strategic sectors such as energy, natural resources and telecommunications.”
The Albanian government has collected a total of around 90 bln lek (USD 833 mln, Euro 632 mln) from the privatization of state-owned assets since the early 90s when the country’s 47-year communist regime collapsed, according to study conducted by Open Data Albania research centre covering the 1993-2011 period.
The study based on Finance Ministry data shows that most privatization revenues were collected during the past decade from the sale of key assets in the banking, telecommunication and energy sectors. What’s particular about privatizations in Albania in the post 2000 period is that they have peaked in general elections years or pre-election years such as in 2001, in 2004 and in 2009. The study finds out that privatization revenues in these years have covered 20 to 30 percent of budget deficit.
