Oltchim can be privatised, but IMF is ‘very sceptical’

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Economy Minister Varujan Vosganian had consultations with both the Russian ambassador to Bucharest and the Romanian ambassador to Moscow, on issues concerning the plants in Romania.

The government has several offers for the Oltchim Ramnicu-Valcea plant from chemical plants, Romanian companies and traders of products and raw materials, Economy Minister Varujan Vosganian stated yesterday on Pro TV. “I can’t tell you who they are because it wouldn’t be fair and because I don’t want to transform Oltchim’s privatisation into a show like the one last year,” Vosganian added.

According to Vosganian, Oltchim continues to be a “privatisable” company, however international financial bodies, including the International Monetary Fund (IMF), are “very sceptical” about the success of such a move. “I have three time frames for Oltchim. A short one, of two months, in which I have to solve the problem of its current functioning. (…) The medium one is June-July, because until then we have to know whether Oltchim is privatisable or not. I am still adamant to believe it is,” Vosganian stated. Minister of Economy Varujan Vosganian presented Friday the evolution of the privatisation initiatives conducted by the Ministry of Economy (ME) during an informal meeting with Tonny Lybek, the IMF representative for Romania and Bulgaria, informs the press release.Russia’s TISE is one of the companies that expressed some interest in buying Oltchim, without however making an offer. Oltchim is insolvent since the start of this year. Vosganian added that he had consultations with the Russian ambassador to Bucharest and with the Romanian ambassador to Moscow, on issues concerning Oltchim and the Romanian plants belonging to Russia’s Mechel Group, which were recently sold for EUR 52.  “I had a long talk with Russia’s ambassador on various issues and we touched on the Oltchim issue, the Mechel issue and the Alro Slatina issue. I also talked about the possible continued cooperation with Gazprom on some of Gazprom’s formulas. It’s not about Russia’s interest for Oltchim, it’s about the interest of some Russian companies. Based on the consultations I had with the Russian ambassador to Bucharest and the Romanian ambassador to Moscow, this hypothesis continues to exist within our offer spectrum. I cannot state that it is better than others because I haven’t moved on to a concrete offer with any of the possible bidders,” Vosganian added. He pointed out that he also has a “plan B” in what concerns Oltchim, which consists of accessing funds from a consortium of banks and appointing a private management that would attract traders of products and raw materials too in supporting the chemical plant. According to the Economy Minister, Romania should reindustrialize itself and “skip stages” when developing high-end industries, adding that most state-owned companies should be privatized. “All state-owned companies should be privatised, except for the Vidraru and Iron Gates dams, in other words Hidroelectrica, except the nuclear reactors we built, except Transgaz, Transelectrica, maybe some components of the defense industry and certain sections of the railway lines for passengers,” Vosganian stated. In what concerns CupruMin, the Economy Minister stated that there are three “very serious” offers, but there are also other options such as attracting traders of raw materials or SIFs. Last Wednesday the government approved a memorandum that shows that CupruMin needs financing for retooling, environment expenses and enlarging its areas of extraction. Vosganian pointed out that for the time being the government does not take into account selling CupruMin shares, taking into account only forming an association on a specific activity. At the same time, Varujan Vosganian asked the Public Finance Ministry (MFP) to speed-up the evaluation of VAT reimbursements for Mechel Group, the total sum being RON 150 M. “I didn’t hit the table with the first, I said speed-up the evaluation in order to clarify the issue. There might be transactions that would lead to not reimbursing the VAT,” Vosganian stated.

Number of public sector employees should be lowered

Referring to the number of public sector employees, he stated that it should be lowered and the Ponta Government has the “historic role” of being the first government open towards society and the market economy, the Economy Minister stated. He made the statement in the context in which he pointed out that a “very severe” audit within the public sector will be conducted along with Administration Minister Liviu Dragnea and other colleagues in order to establish the optimal number of employees. According to Vosganian, the number of public sector employees should be lowered until 2018. Until then the number of jobs in the economy should grow by at least 1 million. The public sector currently has approximately 1.2 million employees.