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Our View: Finally a voice speaks up for privatisation

Marios Demetriades

IT COMES as a breath of fresh air to hear a minister, occasionally, singing the praises of privatisation in a country in which the dominant political view is that state ownership is sacrosanct, often described as ‘public wealth’. Ten days ago, presenting an overview of his ministry’s achievements, Minister of Transport, Communications and Works Marios Demetriades provided proof of the benefits of privatisation.

Since the demise of the loss-making, state-owned Cyprus Airways in early 2015 total air traffic has substantially increased. In 2013 it was 7 million whereas this year it will be more than 10 million. For years, the champions of state ownership justified the huge losses of Cyprus Airways by arguing that a country dependent on tourism needed its own national carrier. Funnily enough, in the last couple years without a national carrier new records in tourist arrivals are being set and broken.

However, in the last five years, without a national carrier to protect in the last three years, 32 new airlines began flying to Cyprus and 64 new destinations were added. What the minister failed to mention was that apart from the bigger choice people are benefitting from much lower air fares. During Cyprus Airways’ dominance they were paying top prices so the airline’s staff could collect astonishingly high wages.

The state is also benefiting from the privatisation of Limassol port and so are businesses which are now provided with a much more efficient and prompt service, no longer at the mercy of militant port workers who would close the port over the most trivial issues. Productivity has increased dramatically. As Demetriades said, the average servicing time for trucks is now 12 minutes compared to one hour when it was in state hands; servicing time for ships has been reduced by 50 per cent as a result of better usage of the gantry cranes. The ministry estimated state revenues of close to €40 million compared to an average of €21 million it collected when the port was still part of the ‘public wealth’.

Cyta, which has seen its profits steadily decline since the telecommunications market was opened to competition, will eventually suffer a similar fate to Cyprus Airways. EAC unions have been defending the Authority’s monopolistic status with strike threats aware that it would not be able to cope with competition. It was not on a whim that the Troika insisted these organisations should be privatised. They would become more efficient and competitive under private ownership, offering a better and lower-priced service to people. This must be the objective and not the protection of the privileges of overpaid workers until the organisation finally go bust.

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