BUSINESS

Nica, MCSI: Post could have been profitable if it had not been robbed

The Romanian Post could have been a profitable company if it had not been ‘robbed in a horrible manner’, by the conclusion of a number of ‘bad and unfavourable agreements’, the Minister of Communications and Information Society, Dan Nica, said during a PRO TV programme yesterday. ‘When I left the Ministry in 2004, the Romanian Post didn’t know how to spend the money it had. If I remember well, it had a profit of several tens of million of euro and were doing overnight placements because they didn’t know what to do with the money. When I took it over, in May 2012, I received a letter from the former CEO telling me the company was going bankrupt on June 13, 2012. I asked why it was going bankrupt. The answer was that there was nothing else to be done, that the company had been fined with over RON 100 M by the Competition Council and owed the state budget, banks and suppliers over RON 600 M’, Nica said. He went on: ‘Over time, the company has concluded a total of 50 unfavourable agreements. For example, the Post signed an agreement with Blue Air for the air carriage of mail worth several tens of million of euro, while it had no money to pay the petrol for its own vehicles. The agreement was signed by one of the CEOs the Post has had in the last few years’, Nica said.
Another bad contracts, worth several tens of million of euro, was signed by the Post with a security and valuables transport company, Smart Telecom Solutions SRL Bucharest. ‘(…) A company that had no employee in 2010 or 2011 received a contract for setting up POSs at all post offices, but never set up any. The Post, the technical director of the company rescinded the agreement under the wrong clause marked with the wrong letter. The Court found that the rescission was illegal and awarded EUR 5 M in compensation to the company’, Nica said. He added that the legal director of the Post had been dismissed and the case had been forwarded to the DNA.
Nica pointed out that the Post could have been a profitable company if it had not been ‘robbed in a horrible manner’. ‘Twenty years ago, the Post had 100 per cent market share in the segment of rapid parcel shipping. Now it is down to 2 per cent. How was that possible? Well, the former manager in charge of the operations had his own private company. His company was billing the services, and his company was delivering the parcels using Post vehicles. When he appreciated he had got enough, he simply went away and the company was down to 2 per cent. This case and other ones are now under investigation, and I cannot enlarge on them’, Nica said. According to the minister, 95 per cent of the unprofitable contracts awarded by the Post have been terminated. The 2010 Court of Auditors Report states the Romanian Post concluded and executed, in 2008-2010, two agreements for the provision of services with a value of EUR 5.5 M exclusive of VAT, valid for four years, and with a value of EUR 5.8 M plus VAT, valid for five years, for the provision of medical services. The tariff for those services was subscription-based, the payment being made on the average number of employees in a certain month and not based on how many people actually received the medical services, the contracts being executed in a proportion of 9.3 per cent and 3.5 per cent, respectively, the document states.

Lay-offs and huge monthly wages
Asked how many employees would be laid off, Nica said that, according to the job descriptions for the year 2011, there was a surplus of roughly 4,500 employees. On Friday, the company said 3,650 workers would be laid off, representing 11.4 per cent of the staff, the figure being set after negotiations on the introduction of new job descriptions carried out between the management of the Post and trade unions.
Asked if the monthly salary of 6,000 euro paid to Post Manager Ion Smeeianu, while the company was unprofitable and with unpromising prospects ahead, the Minister for the Information Society gave a negative answer. ‘The answer is no, but if we assess the situation of the Post 12 months after Mr. Smeeianu took over his term, period when he has managed to cut the company’s loss by RON 90 M, then the answer is yes. He is supposed to reach a set of performance indicators which, if I show them to you, you will ask that they are applied to all state-owned companies in Romania. If Smeeianu fails to reach those indicators, we will cut his salary’, Nica said. He added Smeeianu’s objective for this year was to bring the company back on operating profit. In addition, according to Nica, the difference between the compensatory salaries at the Romanian Post and those of former heads of insurance and securities regulatory bodies was ‘a shame’, ‘a ridiculous and unacceptable situation’. He pointed out it was necessary to amend the legislation on the remuneration of the heads of regulatory bodies, a process that however might be blocked by the European Commission who could say that the financial independence of those institutions is affected by any Government interference, including a possible pay capping.
According to reports received by the Ministry of Public Finance, the highest monthly gross wages paid to state-owned enterprises in Q1 were at Tarom (16,622 euro), CFR SA (14,70 euro), Romanian Post (12,834 euro) and ROMATSA (12,079 euro). The following places are occupied by the directors general or presidents of Oltenia Energy Complex  (6,592 euro), CFR Marfa (6,341 euro), Transgaz (6,190 euro), Electrica Distributie Muntenia Nord (5,284 euro), Antibiotice SA and Hunedoara Energy Complex (4,454 euro each), Transelectrica (4,416 euro), Electrica Furnizare (4,303 euro), Constanta Maritime Ports Administration (4,077 euro) and National Printing House (4,063 euro). An analysis of the draft budgets highlighted an uneven practice in what regards both the proposed salaries of managers and the actual payments made in the first quarter, the Finance Ministry notes.

Privatisation followed by bad luck
Nica regrets ‘nobody came’ for the privatisation of the Post, although he has talked to a number of prospective investors. The minister said the privatisation had been ‘followed by bad luck’. Asked why the authorities were not listing the Post on the Stock Exchange, Minister Nica said such a process meant sale at market price, which was inconsistent with the current objectives of the state.

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