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Cabinet approves roadmap for privatisations (Updated)

Government spokesman Christos Stylianides

By George Psyllides

The cabinet on Thursday unanimously approved the roadmap for the privatisation of state companies that is part of the terms of the island’s €10 billion bailout.

Government spokesman Christos Stylianides said the process will be evolutionary, and expected to last three years.

“The first privatisation will take place after two years of preparing and restructuring a specific organisation,” Stylianides said, a period when Cyprus is expected to return to growth.

The spokesman said there was no question of fully privatising any organisation.

Stylianides said Cyprus must first see how to overcome the recession, and at what stage of growth the economy would be when it seeks investors.

“The decision will be implemented in the in a manner that will yield the best results for the state,” the spokesman said. “In the meantime, any proceeds from casino licenses for example, or other sources, will be taken into consideration and counted towards our obligation to find €1.4 billion so that we have more flexibility as regards the form and extent of the denationalisations.”

Privatisations are part of terms in the island’s bailout agreement. Cyprus must raise €1.4 billion through privatisations between 2016 and 2018.

The roadmap was a condition for the release of the third tranche amounting to some €185 million.

It must be approved by international lenders before the cash is released later this month.

“We are in continuous consultation with the troika. We expect their stance to be constructive,” Stylianides said.

The decision ensured the workers’ participation in the procedure and secured their rights. They, as well as the wider public, can also take part in the ownership.

Each organisation will be handled accordingly, depending on the nature of the service it provided, the spokesman said.

Unions oppose privatisations and have already staged warning strikes. They have threatened to escalate if the government went through with its plans.

Stylianides said the dialogue with the unions will continue throughout the transition period so that the best results were achieved.

Based on the roadmap, the first organisation slated for privatisation is state telecommunications company CyTA.

The organisation’s board said on Thursday that the current period was not suitable for the sale of CyTA or any part of it.

In a written statement, the board said CyTA must immediately restructure in a bid to cut costs and increase its value.

This way “the state will continue to have an asset of increasing value, which can be used in the best possible way without pressure and timeframes.”

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