What do a locksmith from Cacka Jovan Gavric, an agronomist from Pancevo Sinisa Pavlovic, a lawyer from Zajecar Milovan Misic, a pharmacist from Uzice Zorana Jeftovic and a house wife from Sabac Mirjana Pantelic have in common?
Every one of them, against their will, has on their own account a debt of 500 euros which was not made by them but by the Serbian public (state) companies. That sum is not only on the account of the people stated above, but on the accounts of every citizen of Serbia.
You get to that number by dividing the 4 billion euros, which is the amount of loses of 570 from 590 public companies, with the number of people in Serbia.
But that is not it. Every citizen gets another 35 euros of dent every year, which is a total of 250 million od euros which are spent on loans covering the loses of public companies and on government subventions that those companies get from the government in order to survive.
Looking at such items it is difficult to decidedly say that the government is spending so much of the tax payer’s money on covering loses and giving subvention to its companies. But it’s no secret that the money is “being drained” (or carried out in plastic bags) through “exotic” channels, like, for example, position intended for financing nongovernment organizations.
Officially, the government is not hiding that it is “intravenously” keeping alive the Railways (with more than 120 million of euros a year) and the mine Resavica (20 million euros) which cannot be sold even if there is a very interested buyer, because the workers think that the mine is worth much more than the buyer is willing to pay.
Taking into account that some of its companies are not able to repay its debts, there is a reasonable doubt that the government (as the owner) has to be the warrantor who will return the loans to the banks. And by the available financial reports, the Electric power industry of Serbia owes a billion euros, the Roads of Serbia 300 million euros, Jat around 100 million (only last year it made a loss of 25 million euros) and the Copper Mining and Smelting Complex Bor 134 million of euros which the government is willing to buy off in direct negotiations with the foreign creditors (plus the loss of 500 million euros).
The state in those companies is still not improving. On the contrary, it is only getting worse in spite of the assurance of the government that it will ask for a raise of efficiency from their management structures.
The data show that from 590 public companies 570 is doing business with losses greater than 4 billion euros. “As a rule a truth repeats that the companies that belong to the government or do business with the government get into business difficulties”, says the president of the Board of executives of a bank whose headquarters is not in Serbia.
The national airliner Jat can serve as a bad example which (after four failed attempts of restructuring) has gotten a new general manager at the end of last year.
The new manager has promised (like four or five of his predecessors) “the moon and the sky”, and the government fell for it and consented to Jat entering this year with a planned loss of 19,8 million euros, and it gave it 51 million euros in loan. Jat spent those funds in four months, even though it was supposed to use the loan for 12 months, and now it turns out it has no means to return the loan.
As a consequence of such management, all the partners that Jat does business with do not accept any other way of payment except “free cash hand”. Instead of running it into bankruptcy, the government is hiring fifth consultant in a row with the task to make a new restructuring study of Jat for 1,2 million euros.
But, there was a problem when the government realized that they didn’t plan for the money for such a study in the budget (there was a belief, I guess, that Jat will do business well), so the 1,2 million euros is taken out of the budget reserve. By the way, the government already spent six million euros on the last four restructuring studies.
Since there is less and less money in the budget for covering losses and for subventions, the government has prepared a draft of the Law of the private-public partnership and at the same time started negotiations with the International Monetary Fund on the reform of the public companies, and the final agreement is expected on fall.
Even so, a lot of people are not ready to interpret the statement of the deputy Prime Minister Bozidar Djelic that „there is a consensus in Serbia on not privatizing the major packet of the capital of public companies” as a definite closure of the door to the restructuring of the public economy sector.
But, the question is, whether the tax payers had to cover the losses of the public companies till now, or why us the budget being (mis)used for such purposes when the government had at its disposal a lot more rational solution for that problem.