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Business Cyprus

Cabinet submits privatisation legislation to parliament

CyTA employees protesting yesterday

By Elias Hazou

THE government yesterday submitted to parliament legislation governing the denationalisation or privatisation of state-owned enterprises.

Formal debate on the government bill begins at the House finance committee on Monday. Attending that session will be the finance minister, the Attorney-general, the chairmen and general managers of CyTA, the EAC and the Ports Authority, leaders of the affected trade unions and reps of the employers and industrialists federation.

The bill is titled “Denationalisation Law of 2014.” It grants the Cabinet, which will monitor overall implementation, powers to issue decrees specifying which state-owned enterprise is to be privatised.

Cyprus’ international creditors have made it clear that passage of the legislation this month is a precondition for the disbursement of the next tranche of bailout money.

When it does come up for a vote at the plenum, the bill can pass with a simple majority – more ballots cast in favour than against.

AKEL and socialists EDEK have already stated they will oppose the legislation, and all eyes are on DIKO, whose support ruling DISY needs for the bill to pass muster.

The pass/fail permutations for the bill are several. Assuming DIKO joins DISY and the European Party in voting for the bill, it can pass. Likewise, if DIKO and EDEK were to abstain. On the other hand, the legislation would be defeated in the event DIKO abstains, and AKEL and EDEK vote against. It goes without saying that the bill is doomed in case of a negative vote from AKEL, DIKO and EDEK.

The legislation provides for the establishment of an inter-ministerial committee – headed by the finance minister – that will issue guidelines and road maps for privatisations. The committee will also engage in negotiations with the international creditors.

Two new bodies will be created to execute the legislation: a denationalisation department, housed at the finance ministry, and a denationalisation commissioner. The denationalisation department will consist of four civil servants who will be assisted by financial experts, to be hired on a contract basis. The unit will act as an advisory body to the denationalisation commissioner.

The bill states that denationalisation may be carried out through usual trading practices, such as sale, transfer or lease of assets (movable and immovable), partially or in full.

Meanwhile the plenum last night passed laws abolishing two semi-governmental organisations, the Cyprus Dairy Industry Organisation and the Wine Products Council.

The two entities’ functions and staff are transferred to the ministry of agriculture. A separate legislative proposal dealing with the affected employees’ career prospects is to be tabled to parliament at a later date.

The two SGOs were of a number earmarked for closure in a bid to slash government subsidies as part of cutback efforts.

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