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Sunday 17.12.2017 | Name days: Teiksma, Hilda

Additional 75 million lats to be obtained in dividends from state-owned companies

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By increasing the yield on state-owned companies’ assets to the level of the European Union (EU), additional 75 million lats would be obtained in state dividends, the Prime Minister Valdis Dombrovskis informed the journalists.

Such conclusion was made after examining the annual report on the Latvian state-owned assets in 2009, which was prepared by the Baltic Institute of Corporate Governance (BICG). This assessment is the first of this kind, and it was carried out by financial sector experts from Latvia and the Baltics. According to the Prime Minister, a special work group will be arranged, which will have to work on the implementation of the specified proposals.

In 2009, the state has received 185 million lats from the state companies’ assets; however, according to the drafters of the report, it was possible to increase the volume of dividends up to 260 million lats, at the same time, maintaining the funding for the development of businesses.

Dombrovskis emphasized that this was the reason for the work on the improvement of the national asset management, and it is possible to do it during the following three years.

Moreover, it was also concluded that the yield of assets in the telecommunications sector in Latvia is 8.3%, but in Europe – 8.2%; while in the power sector – accordingly 1.2% over 16.3%, but in the transport sector – 2.9% over 3.1%.

One of the main recommendations was the need for a coordinated action, because, currently, the monitoring of state enterprises and assets is too fragmented. Consequently, this situation is creating conditions where conflicts can easily develop; therefore, a single report is the first step.

In addition, it is also necessary to establish a professional management that would, for instance, develop management policies for each state asset, centralise the management of companies, and set specific goals for enterprise boards, and determine equal control mechanisms, similar to those in the private sector companies, to achieve the goals.

The recommendations are also linked to the assessment of the further state participation in business activities, for instance, re-evaluating the policy documents and the current assets base.

It is noted that the state is now the owner of a range of enterprises that are competing in the open market with private companies.

Moreover, it is also recommended to increase the availability of the information.

At the same time, though, it is stressed that the possible privatisation of state-owned companies is out of question, as the law, which determines the non-privatisable companies, will not be modified. The work group will mainly focus on improving the management of the state-owned assets.

Overall, 142 assets of state-owned enterprises are evaluated in the report.

The financial situation of state-owned enterprises, compared to private companies that operate in the same sectors in other markets, are contrasted and evaluated in the report on state assets in 2009.

It was concluded that in 2009 the total state assets, excluding the financial sector, have comprised 3.6 billion lats.


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