Cyprus Mail

CyTA unions meeting Anastasiades on sell-off

By Elias Hazou

Trade unions of the state telecoms company CyTA were on Wednesday urging President Nicos Anastasiades to withdraw legislation paving the way for the organisation’s privatisation, to which they are fiercely opposed.

The meeting at the presidential palace was set for 9am, according to the Cyprus News Agency. There, union reps are to lay out their own proposal to reform CyTA in lieu of denationalising it.

The five main CyTA unions have called on the political parties to reject the bill – approved by the cabinet on Monday – when it comes to the House floor.

Publically, all parties bar ruling DISY have so far disavowed the mooted privatisation of the state telecoms company.

A stepping stone to the eventual privatisation of CyTA, the bill transforms the company from a public-law organisation to an entity governed by private law. It provides for the creation of a company belonging to the state initially with the aim of attracting a strategic investor at a later stage.

The draft bill was submitted to parliament on Tuesday. CyTA employees are given a variety of options, including continuing to work for the new company under the same terms, a voluntary exit package, or leaving CyTA and being seconded to another department in the public sector retaining their career status and benefits.

The state will retain a substantial share in the company. How much has yet to be decided – and this might prove to be a key point in the political process.

In spite of their rhetoric, some parties may be willing to water their wine, depending on what stake the state will retain in CyTA. Socialists EDEK insist the state should keep a majority interest in the new company, while DIKO has previously been open to a partial privatisation.

The five main CyTA unions on Tuesday meanwhile launched a series of meetings with political parties. The first one, with DISY, did not go so well for them.

Elias Demetriou, the head of the EPOET OIO-SEK trade union, later told reporters that “we agreed to disagree with DISY.”

Likewise Doros Theodorou, head of the SIDIKEK-PEO syndicate, fired a shot across the bow, saying the unions would be discussing a possible escalation of industrial action.

Despite government assurances that the bill leaves workers’ salaries and perks intact – even once they are hired by the new telecoms company – unions are wary of the fine print.

They say for example that even though the bill secures the current collective agreement, this will only apply for one year.

On the same day, after meeting the unions, AKEL vowed to “fight to the end” to prevent CyTA’s privatisation.

But AKEL leader Andros Kyprianou seemed to be anxious that the other opposition parties might break ranks.

Speaking to the media, Kyprianou said that should the bill make it through parliament, AKEL would make sure to repeal the legislation once his party returned to power.

CYTA’s intended denationalisation, he added, has less to do with the demands of the troika and more with the government’s “philosophy” of putting public assets under the hammer.

The privatisation of CyTA is a prior action demanded by Cyprus’ international creditors for the release of the last bailout tranche of €400m, which includes the €200m slated to recapitalise the Cooperative Central Bank.

Speaking to the public broadcaster earlier on Tuesday, finance minister Harris Georgiades stressed that privatisation is necessary if CyTA is to remain a going concern in the longer term.

“CyTA has a good image among the public, it has profits…so precisely now is the time to try and bring in a strategic partner,” he said.

“You cannot attract an investor to a company which runs losses, does not have a substantial market share and has a poor public image. This is what we experienced in the case of Cyprus Airways, and we don’t want CyTA to go the same way.

Asked whether he was taking it for granted that CyTA’s market share would shrink going forward, Georgiades said this estimation was borne out of the trend over the past 10 years.

“Currently, competition to CyTA comes not just from the three or four domestic, Cyprus-based competitors. The biggest competition comes from advancements in internet and communications technologies, which are so rapid and fluid that we should not take today’s situation for granted.”

The minister said that claims to the effect the government intends to “sell off” the company and its assets are misplaced.

For one thing, he explained, subsequent stages in the privatisation proceed would need the nod from parliament.

“For example, when we find the [private] investor, the proposal will be put to parliament. If all goes according to schedule, we estimate this will happen towards the end of 2016. Then people can decide whether it is a good deal or a sell-off. If it is a fire sale, then when decision time comes, let the deal not be approved.”

There was “no chance” the government will put to parliament a proposal that is tantamount to a fire sale of CyTA, he added.


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