bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Wednesday 26.04.2017 | Name days: Rūsiņš, Sandris, Alīna
LatviaLatvia

SA: the time has come to decide on ending privatization

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia has a long privatization history. Even in 2003 the government was aware that the goal of privatization had already been reached. With that, officials had suggested ending the process back then.

In 2005, the government adopted the Law on Conclusion of Privatization of State and Municipal Properties and Use of Privatization Certificates. This law created a legislative base that should have led to a soon conclusion of the privatization process. Unfortunately, no fixed terms were established and privatization continues to this day.

As concluded by the State Audit in its recent survey regarding the state of the situation with privatization of state property, privatization is, indeed, in its finishing stages, which has been continuing for the past seven years. Over the course of these seven years, only 3% of available state owned apartments were added to the list of privatized properties and only 2% of certificates were used. The Privatization Agency has only a small list of real estate properties that has not changed over the course of the past several years, which points to the low degree of interest of private persons for their privatizations.

The Privatization Agency also carries out the alienation of apartment homes and other residential real estate properties. The volume of alienated objects is larger than the volume of privatized properties. The audit’s uncovered information regarding long-lasting attempts to alienate real estate objects points to the fact that the level of interest residents is also low. With that, the country’s revenue is also low.

The number of unused privatization certificates – is only slightly above 2% of the initially issued certificates. Servicing privatization accounts costs the state more than EUR 300,000 annually. In addition, the number of those accounts does not seem to decline. Furthermore, 62% of privatization accounts for private persons have no more than 1 certificate per account: this means that the majority of residents have already used their privatization certificates for state and municipal objects.

The State Audit has recommended to Economy Ministry, as the institution responsible for the privatization policy, to assess the possibility of concluding the privatization process and use of privatization certificates with preliminary efficiency analysis of measures and policies. This would allow the planning of future actions and necessary steps to conclude the privatization within predicted terms. Continued inability to find a solution in relation to the conclusion of privatization and the inability of making the decision on a specific term for the conclusion of the privatization process will likely create additional expenses for the state budget.

Revenue of the Privatization Agency is formed at the expense of finances received from the privatization process. Unfortunately, the revenue has not been sufficient to cover the agency’s own expenditures since 2013. Because of this, the State Audit has asked Finance Ministry to assess the situation and decide whether or not the agency should be dissolved.

Economy Ministry has informed State Audit that the Privatization Agency has developed a project for medium-term strategy for 2016-2018. It is planned to submit this plan for approval in the nearest future. The Privatization Agency plans to become a single platform for selling state assets. It is worth mentioning that Economy Ministry has not yet developed and submitted documents in regards to the agency’s future activities to the Cabinet of Ministers for review.

As noted by State Auditor Elita Krumina: «This is a case when the cart is put before the horse. No matter the intentions of the Economy Ministry or the Privatization Agency, all actions must be carried out consecutively and in order governed by law. First of all, it is the government’s duty to develop a comprehensive objective for the agency. Only once it is complete will it be possible to develop a strategy for the Privatization Agency».

The State Audit calls the ministry to assess the point of allowing the agency to continue to function. Most importantly, the assessment should be based on the core function of the agency – the privatization process. The fact of delegation of other tasks to the agency shows that securing the privatization process costs the agency less and less resources. If the agency has managed to acquire other competences, not related to privatization, over the years, it is necessary to assess how those competences can be used more effectively.

Improvements are necessary for Economy Ministry’s management of the agency. Flaws include the fact that the ministry has not approved specific and measured results for the agency and has not assessed the agency overall results. Consecutively, indexes of results provided by the agency are not focused at ending the privatization process anytime soon: in 2014, in comparison with the year before, they were reduced by 70%.

In addition, by allowing board members to combine posts, the ministry did not assess the possible lack of contribution to the accomplishment of results of the agency such permission would provide. At the same time, increasing the number of board members has increased the agency’s expenditures by at least EUR 36,000 annually.

In total, State Audit has extended 13 proposals to Economy Ministry. State Audit will monitor compliance and realization of those proposals.

Ref: 102.109.109.8972


Leave a reply

Vegetable producers: the industry has a future, but it is burdened by taxes

Compared with Europe’s southern territories, vegetable and fruit production in Latvia has a future, says manager of Mūsmāju dārzeņi association Edite Strazdina.

European Commission takes on Hungary regarding its higher education law

EU’s European Commission has commenced legal action against the Hungarian government in relation to the country’s education law, which is said to be endangering Budapest’s Central European University.

Last year foreign travellers stayed in Latvia for longer, but spent less money

In 2016, foreign travellers crossed the border of Latvia 6.8 million times, which is 0.7 % less than during the previous year. Last year foreign travellers spent EUR 645.2 million in Latvia – EUR 97.0 million or 13.1 % less than in 2015.

Pulks: Riga municipality’s social network accounts are financed by residents; KNAB investigates

«Social network accounts of Riga municipality were created using money of Riga residents. They cannot be illegally privatized to then be used to accomplish political goals,» says Riga City Council’s Unity faction deputy chairman Olafs Pulks.

Ministry: Latvian companies have unused potential in exploring Spain’s market

Latvian companies have unused potential in exploring Spain’s market. This is why the opening of direct flight connectivity between Riga and Madrid could open up new opportunities for business and tourism, says Latvian Foreign Affairs Minister Edgars Rinkevics.

Every third resident would be unable to pay bills if they lose their job

Every third Latvian resident would experience difficulties covering monthly expenses if they suddenly lost their job, according to results of Swedbank Insurance study.

Estonia’s health workers agree to pay-rise solution

Following five months of talks with Estonian government and health officials, five Estonian trade unions of health workers have signed a collective agreement, agreeing to a pay-rise and abandoning plans to hold long strikes.

Economist: Latvian residents’ overall satisfaction with life is below most EU countries

There are many different measurements in the world that seem impossible to measure – our quality of life and development progress, says Bank of Latvia economist Daina Paula in a publication of makroekonomika.lv, commenting on different measurements that help characterize development of national economy and people’s quality of life.

Estonian ex-PM: Bronze Night riots in Tallinn coordinated by Russian officers on site

On the 10th anniversary of the Bronze Night riots in Tallinn, the then Prime Minister Andrus Ansip has noted that Russian special forces’ officers were in the Estonian capital coordinating, where vodka and flammable liquids were supplied.

Reporters Without Borders: media experience unprecedented threats

«The freedom of press in the world has never been more at risk than it is now,» announced Reporters Without Borders in its annual World Press Freedom Index on Wednesday, 26 April.

Several media-related people become candidates in municipal elections in Latvia

Among candidates that intend to participate in the upcoming municipal elections in Latvia are several people who are closely associated with the media environment. Not all of them, however, have direct ties to journalist work.

Coca-Cola facing lower demand to cut 1 200 workers

U.S. company Coca-Cola has stated that it plans to lay off around 1,200 workers in the world as the fizzy drinks producer is facing lower demand.

Cyber-security experts: Macron’s campaign in France targeted by hackers

The campaign staff of French presidential candidate Emmanuel Macron has been targeted by a group of Russian hackers, employing an extensive arsenal of high-tech tricks to acquire the login names, passwords and other credentials, security experts have found.

Ministry: EU should oppose hybrid threats more strongly

«To strengthen EU’s defensive capabilities, member states should increase defence expenditure and work to further enhance cooperation and coordination in the entire union. At the same time, the EU should further enhance its capabilities to better oppose hybrid threats so that they cannot be caught off-guard,» notes Latvian Foreign Affairs Ministry’s parliamentary secretary Zanda Kalnina-Lukasevica.

Ombudsman turns to Constitutional Court over low wages of medics

Ombudsman Juris Jansons has decided to turn to the Constitutional Court over non-compliance with requirements of Medical Treatment Law in relation to the principle of equality and guaranteed rights for fair pay.

Vejonis: new tax system will start working if everyone starts paying taxes honestly

«To improve the development of Latvia’s national economy and residents’ welfare, it is important to realize an efficient tax reform, which is one of the main objectives for the government,» said Latvian President Raimonds Vejonis during his meeting with chairman of Latvian Free Trade Unions Association Egils Baldzens on Tuesday, 25 April.

Verzemnieks: non-taxable minimum for pensions should be increased to EUR 500

The government has to realize a tax reform in which non-taxable minimum is increased to at least EUR 500, says author of the Tax-free Pension initiative Arnis Verzemnieks.

Swedish meteorologists warn of up to 20 cm snow

While people in Baltics are asking, when will arrive the warm part of spring, weather forecasters in Sweden warn of heavy post-season snowfall, which could bring up to 20 centimetres of snow.

Producer price level in industry up 0.1% in Latvia this March

Compared to February, the average level of producer prices in Latvian industry grew by 0.1 % in March 2017.

Lembergs continues prolonging court process; prosecutors concerned

Aivars Lembergs’ criminal case remains in court for the ninth year. The past seven months have been spent solely on listening to Aivars Lembergs’ testimony. Prosecutors are concerned that the accused may be using his testimony to prolong the court process, as reported by Latvijas Radio about the state of the criminal case and prosecutors’ opinion of it.

Swedbank: Latvian residents often lack the money to cover all expenses

Latvian residents plan their family budget in a short-term perspective. Because of that, they often lack the money to cover all expenses, according to data of a study performed by Swedbank Institute of Finances.

In pictures: Protesters in Venezuela block roads in nation-wide sit-in

Opposition protesters in Venezuela rallied on Monday, April 24, promising to block Venezuela s main roads to raise pressure on the government of Nicolas Maduro after three weeks of deadly unrest that have left 21 people dead.

CM: the need for media content creation exceeds financial capabilities

The tendering procedure for support of creation of public media content requested five times more money than what is available, said Culture Ministry’s policy department manager Roberts Putnis in an interview to Latvijas Radio.

Cargo turnover of Baltic ports up 5% in Q1 2017

In the first three months of 2017, ports of Baltic States received and transshipped a total of 39.97 million tonnes of cargoes, which is 5% more when compared with the same period of 2016.

Estonia plans to allocate additional EUR 5 million for HIV spread prevention

Estonia plans to invest into HIV and AIDS medications and related services a total of 5,5 million euros, sets forth the state budget strategy for 2018-2021 passed by the Estonian government.