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| The Privatisation of Oltchim Put on Hold |
| (2012-10-02) |
| Last updated: 2012-10-02 14:14 EET |
Huge production costs, too many intermediaries in the selling chain and overstaffing. Such may be described the Oltchim chemical works in Ramnicu Valcea, southern Romania. At present the chemical plant faces immediate bankruptcy due to its hundred-million-euro debt. Seen as a burden for the Romanian state and a bone of contention for the community, there may well be no way for Oltchim out of the stalemate, after the first attempt to pass the company into private hands fell through.
Controversial businessman, populist politician and media tycoon Dan Diaconescu was the main protagonist of the deal. Diaconescu won the tender for the take-over of almost 55% of the company shares, but failed to support his bid with evidence of having the 45 million euros put on the table. What Diaconescu offered instead was a media show, very much in the vein of sensationalist gimmicks televised by his own personal tabloid television station.
The whole thing boiled over with Diaconescu blocking one of Bucharest’s central roadways and his showy attempt to prove that he actually had the cash necessary to pay Oltchim employees’ overdue salaries. This publicity stunt needs to be done with, argues Prime Minister Victor Ponta, who said Diaconescu had only aimed to grab the electorate’s attention. The opposition on the other hand said that the Government would have had the obligation to blow the lid off this media hoax before it unraveled in the public, had it been capable. Instead, Prime Minister Ponta called on officials within the Ministry of the Economy to take immediate measures that would allow employees to get back to work and have their wages paid.
Victor Ponta: “They have to immediately take a number of decisions that in the following period should materialize into a clear-cut strategy that would allow Oltchim employees to keep their jobs and the chemical plant to resume work. Next year we will work out a privatization plan that should guarantee the long-term functioning of the company and the safe-keeping of jobs in Oltchim, Arpechim and other units directly linked to Oltchim”.
This is not the first privatization scheme to spark controversy in the Romanian media, particularly revolving around the authorities’ awkwardness in handling the matter. The Financial Times writes the whole scandal may seriously affect Romania’s reputation in terms of privatizations. The failure to privatize Oltchim is all the more problematic given that many large state-owned companies, eyed by the IMF, the EU and the World Bank, are struggling with debts and have called for a change of management or a sell-out to a private investor.
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