(Podgorica, 5 August 2012) – The citizens of Montenegro, besides electricity, are today paying one of the most expensive fuel prices in the region, while the state had more benefit from the Kotor-based “Jugopetrol” when it was publicly owned than it does today.
The financial statements of the company show that the state in 2001, the year prior to privatization, received €1.7-million in revenue taxes from the enterprise.
In the years following the privatization of the firm, which in 2002 was sold to Greece’s Hellenic Petroleum, the government never again was able to collect this amount. In fact, the tax revenues collected from Jugopetrol would never again go above €1-million.
For instance, in the past year, the Greek owners paid revenue taxes of €774-thousand and the year before this €845-thousand, while the year before that only €51-thousand.
At the same time, the Government tolerated the fact that the new owners failed to meet a substantial proportion of the measures they promised to undertake as part of the privatization agreement (singed in October 2002). The government hasn’t even done a proper review of the agreement to see which measures were implemented.
Hellenic Petroleum was required to invest €35-million within five years, in addition to €4-million that was to be set aside as part of a severance package and another €1.5-million in support to local communities, while the company was required to submit detailed yearly reports.
The Privatization Council, however, claims that they possess only one report. At MANS’ request that they obtain reports for every year about what Hellenic had done to fulfill its promises. In response, the Privatization Council pointed to a documented completed in 2011 that was prepared by a team from the Economic’s Faculty under the title: “Report Concerning the Realization of Obligations Stemming from the Privatization Agreement for Jugopetrol.”
This document states that the management of the company reported that investments to date are higher than €46-million, though the team of economic experts notes that this is a “subjective view of the implementation of the agreement by the management and that it cannot be explicitly compared to agreed upon obligations.”
Similarly, the report notes that the management failed to submit all necessary information, while “when it comes to total investments it is important to underline the difference between what was presented to us and agreed upon obligations that stem from the investments from the resources of the buyer.”
The team of the Economics Faculty therefore concludes that on the basis of the information available, “it is to be believed that we are dealing with investments from the means and at the expense of the company,” which means that the Greek management didn’t invest its own money into Jugopetrol, even though it was obliged to do so, but realized its investment program from the business done by Jugopetrol itself.
The document also notes that the implementation of the severance package couldn’t accurately be estimated, while the number of workers from the moment of privatization till 2010 was reduced by 63% (from 690 to 252 workers). At the end of 2011, the company employed 248 workers.
Given that the Greek owner, as well as the majority of the employers in Montenegro, isn’t immune from acrobatics in business dealings is evidenced by the fact that the majority of workers were hired on fixed-term contracts.
That is, the last financial statement of the company notes that in the last three years, 81 workers initiated judicial proceedings, due to lower earnings and benefits that they received as fixed-term workers. The rulings of the courts found in favor of the workers.
“Jugopetrol” was sold just prior to parliamentary elections in 2002 for €65-million, a decision generally seen as the wrong one today, since neither the state nor citizens have benefited from the deal (while paying increasing fuel prices).
Hellenic Petroleum owns 54% of Jugopetrol, with the MIG, Trend and Atlas Mont funds owning about 17% and around 15% belonging to individuals. The other shares belong to legal entities or are hiding behind custody accounts.
