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The European Bank for Reconstruction and Development (EBRD) is planning to concentrate on less developed states of the Balkans and the former Soviet Union. EBRD is planning to stop doing news businesses in central Europe and concentrate on Balkans and the former Soviet Union, London's Financial Times reports, adding that proposals are expected to secure a final approval at EBRD's annual meeting in London later this month. EBRD has gradually scaled down operations in central Europe. Central Europe's share of new businesses has fallen from 45 percent of the total in 2001 to a planned 15 percent this year. Russia's share rose from 22 percent in 2001 to 31 percent this year. The share of the remaining territories - South East Europe, Ukraine, Caucasus and central Asia will remain roughly unchanged at 53-54 percent, following a big increase since 2001 when it was 33 percent. EBRD's total new businesses would rise slightly from a planned 3.EUR 7 bn this year to EUR 3.9 bn in 2010 The Financial Times says the move comes amid Washington's push for early withdrawal, arguing that the accession of central European countries to the European Union in 2004 showed they no longer required EBRD finance.
Locals and internationals agreed today in Prishtina that the purpose of reformation of local self-administration is not only to satisfy minorities, but it also represents basis of good governance.
These comments came out today at a seminar on The Role of the Municipal Governments in the European Integration Process, organized by the Kosovar Civic Society Foundation (KCSF), under the auspices of the Ministry of Local Self-Administration (MLSA) and at the support of the Community Development Fund (CDF).
Wolfgang Koeth, Deputy Head of the European Commission (EC) Liaison Office in Pristina said that the enforcement of the local self-administration is to ensure that people could identify themselves with their institutions and feel represented.
According to Koeth, the authorities must be close to citizens, especially by organizing their work in a more transparent way, so that people could know who is responsible and what should they do that their views are respected.
According to Koeth, standards will not end when Kosovo gains its final status, expressing his hope that this will happen soon. “EU requires from each candidate to fulfill a number of certain standards before gaining membership,” he said.
Minister of Local Self-Administration Lutfi Haziri said that Kosovo is slowly moving towards the European agenda by completing the transition stage and standards fulfillment as a key to status settlement.
He said that all the necessary structures have been established in the central level and they have initiated projects which aim at raising the knowledge of officials for the European integration process.
Haziri evaluated as important the enforcement of these structures which will help the implementation of this project.
Venera Hajrullahu, Executive Director of KCSF said that the process of European integration is a long and difficult one, and it depends a lot from the political will.
Hajrullahu said that civic society is ready to help the local officials on the EU enlargement policies and Stabilization Association Process.
UNMIK Deputy Head Steven Schook said today that construction of the new power plant is necessary for Kosovo to resolve the problem of energy.
Schook made those comments following a meeting with the Minister of Mining and Energy Et’hem Çeku.
Schook said that the Minister has presented him today the plan for construction of the new power plant. He said that he will sit down with the Head of Pillar IV Joachim Ruecker “and seek the ways for this very important project to be implemented as soon as possible.”
Çeku voiced content with the support and assistance that UNMIK and other institutions are providing for construction of the new power plant.
Days earlier, the Ministry voiced optimistic that they will select the private investor in energy sector by the end of this year.
The Tax Administration of Kosovo (TAK) told KosovaLive that the fiscal evasion is mostly expressed in Kosovo north at the border with Serbia.
TAK Deputy Director Sakip Ymeri said that various goods enter illegally from Serbia without paying any tax.
“Tax evasion happens at the parts where is lack of freedom of movement, such as Kosovo North. During the first trimester we have registered an evasion of €17 million in this part,” he said.
It is learned that VAT and the Tax on Rent are the most evaded taxes, however the Administration is committed in combating this occurrence. “We have already designed a strategy for that,” Ymeri said.
The Ministry of Transport and Post Telecommunications (MTPT) has licensed four operators for postal services.
The Ministry has licensed these operators: Post of Kosovo, Alb Post, Albatring and KCC Company, whereas FedEx and UPS – the other two applicant companies- were not licensed.
The Ministry Qemajl Ahmeti said that licensing of postal operators is a competency of MTPT and it is in accordance with the Law on Telecommunications.
“This step aims at regulating the market of postal services. We will have a competitive, liberal market based on the rule of law,” he said.
Minister Ahmeti said that all the procedures, which are in line with the European Union Law on Postal Services, have been followed.
“All the applicants have fulfilled the demands. However we cannot give the license to two of the companies because of lack of technical documentation,” said Ahmeti.
The Kosovo Business Alliance organized a round table discussion during which it was said that excise application on nonalcoholic Kosovo products would bring domestic producers to bankruptcy. Kosovo Customs Services believe that since outlined by the law, the tax must be collected.
Nonetheless, the Government and UNMIK Customs Service were asked to delay the excise application on non-alcoholic drinks produced in Kosovo for at least three months. During the discussion, local producers required a balance between domestic products and Serbian ones.
Top Joy Director Sylejman Konushevci said the excise is offensive and asked for an explanation. UNMIK Regulation No. 2000/2 brought into power the Regulation on domestic product, which did not specify products for excise application. In January 2001, a signed directive specified that excise is to be applied on domestic products as well.
Government representatives said that not only domestic producers can be excluded from excise tax. Economic Advisor to the Prime Minister Driton Qehaja believes that the requests of Kosovo businesses can be reviewed and means for stimulating domestic producers are possible because the Office of the Prime Minister is leading the Economic and Fiscal Council and the Government and UNMIK Pillar IV deal with fiscal policies.
“In comparison to other countries, the excises applied here is much lower,” said Qehaja.
Customs Service Excise Sector Director Bashkim Arifi said he understands the concern of the Kosovo producers. However, customs service has to implement the law and regulations in power. “I am aware of the contradictions on this matter, but this tax was supposed to be collected even earlier. Excise apply not only to domestic products, but to imported, including alcoholic drinks, as well,” said Arifi.
The Oil Regulatory Council within the Ministry of Trade and Industry announced that a number of companies, licensed for the import of oil products, have sold 3 million liters of industrial oil for higher prices, reported KTV.
According to the council, nine licensed companies have broken the “rules”.
Customs Service Spokesman Adriatik Stavileci said that their mandate does not cover controlling the purpose for which goods entering Kosovo are used. According to him, since not prohibited by law, Customs Service cannot forbid the import of this type of oil.
Apparently, the only way to overcome the current situation of lack of power supply is the installation of new capacities for electric power in Kosovo. This seems to be the best solution for the future. Various donors have conducted numerous studies on this subject. All studies have one conclusion in common: involving private capital in the energy sector.
Lately, Ministry of Energy and Mining Officials have assessed the project on new capacities. A debate was held on this project. Donors seem to support the idea. Nevertheless, they suggest improve the situation through billing electricity for consumed energy. The bad reputation of unpaid bills can cause a dilemma among investors.
Head of UNMIK Pillar IV, Joachim Ruecker, believes that the new power plant project in Kosovo C is important for investors because they will be able to export electrical energy on the regional market. Ruecker also said that installing new energy capacities presents plenty of challenges. These projects are capital.
A Kosovo energy strategy has already offered a project to the private investors: the establishment of a new power plant Kosovo C with a capacity of 1800 – 2100 MW, the rehabilitation of existing capacities in Kosovo A accompanied by new necessary investments in coal mines (establishment of a new mine in Sibovc).
Minister of Energy and Mining Ethem Çeku:
“An administrative directive that foresees the establishment of a steering committee consisting of members from several ministries, the assembly commission, etc has been adopted. The Ministry of Energy and Mining will lead the committee. We have to discuss matters with the Regulatory Office as well. Due to this being one of the crucial projects for the development of Kosovo, we want to be the one to lead and manage it. We are currently discussing the most transparent and sustainable way of executing the project.
“Ruecker and donors have offered their support. The Ministry of Energy and Mining has shown professional potential on managing the project. As far as investments are concerned, we have contacted and visited many companies. Private investors are interested in investing in the energy field. Together with one of the greatest American Banks, we have held discussions regarding the involvement of banks. We expect to conclude the project by 2006 and select an investor in cooperation with donors such as World Bank, European Agency, USAID, etc. Apart from that, the situation requires a rehabilitation of two units within Kosovo A and immediate mine investments,” stated Ceku.
Head of UNMIK Pillar IV Joachim Ruecker:
“I share the minister’s opinion regarding the energy sector being crucial. Overcoming all obstacles would be of great importance. This way, we would have the faith to move forward. It is important that all electricity customers, industrial or households, pay their electricity bills. This will enable KEK to have its own material resources for becoming financially solvent. I also think that the equipment for production and transmission is in a very bad condition. The energy sector will be facing great challenges in short term and long term. The short-term challenge is to start with the new mine. Several middle term challenges in developing the great potential in Kosovo’s natural coal resources, are also expected. The new producer in Kosovo’s electric energy will serve not only for Kosovo’s energy development but also increase the region’s energy potential.
How can we progress and how will we overcome the challenges? Middle term investments require €200 or €300m for installing a new power plant. This challenge will be met best by involving private capital. The Ministry of Energy and Mining is dealing with these issues and Minister Ceku himself is taking over the responsibility. Consensus in this case is very important and we have found a strategy that is currently being presented. This document is on debate here. The document is not perfect in every aspect. Hence, we should discuss changes and improvements that should be made. The strategy has further requirements, which should comply with international regulations,” stated Ruecker.
Ministry of Energy and Mining Official Lirak Haxhiu:
“During this week we have held discussions with the World Bank regarding a grant for assisting in the rehabilitation of the problem with coal ash. The idea is to transport the ash back to the mines in order to cover the mine opening. According to the strategy, Sibovc is identified as a location for the new mine. We are in a hurry to develop this mine. KEK, perhaps the Kosovo Budget and donors might assure material resources for this. The mine will supply both existing and new capacities of energy generation”.
Ministry of Energy and Mining Official Gëzim Pula:
“According to discussions held with participants, it is important to rehabilitate existing capacities in Kosovo A and generate new capacities. In order to support these developments, we need to invest in the sector of mines by developing a new mine in Sibovc. All this is necessary to secure a steady supply with electricity in short and long term.”
Head of USAID Ken Yamashita:
“I must say that I might have retired by the time Kosovo C will be inaugurated. We have to understand we are not dealing with a process that will be completed in five or six months. All of us should accept this reality. All should be transparent because we are dealing with a project that will involve enormous sums of money and the public should know that the Government is responsible for the way tax payer’s money is spent. We are hearing that Europe and USA are interested in investing in the energy sector in Kosovo.”
World Bank Representative Kantan Shankar:
“I think that Kosovo is a place where many public debates take place. I have worked in many other countries and I have not had the opportunity to listen to so many debates. The Ministry of Energy and Mining is currently organizing debates in various municipalities. I think this is good. The suggested new power plant has potential and the social sector, private sector and authorities will benefit from it. Legal framework for investment should be transparent and compete in a fair manner”.
Ministry of Energy and Mining Official Salvador Elmazi:
“The project foresees that the first phase from 2012 – 20014 will begin production units up to 1000 MW. The second phase is optional and depends on the market demands and studies of possibility and limit analysis. According to an EAR feasibility study, the installation of new generating capacities per KW Hour in 500 MW units will cost €884. If we exclude capital cost in 500 MW units to produce 1 MW will cost €13.39. According to the study, invested capital will be paid back within 14 years.”
According to an eight-page letter sent to the Kosovo Prime Minister by former Custom Service Anti-Smuggling Unit Official Bedri Shabani, the Kosovo Budget was depleted for €6 billion during 1999-2003 as a result of misuse through forged receipts and smuggling of cigarettes, oil products and other goods, reported Koha Ditore.
Although the Anti-Corruption Agency has already been established, Government Spokesperson Ulpiana Lama stated that such a thing is within the responsibility of UNMIK Pillar IV and as she put it, “the gentleman should turn to the Head of the KTA Board, Ruecker.”
According to the daily, Shabani has informed the office of the president, all previous prime ministers, former and current Minister of Economy and Finance on the issue of misuse and corruption within the Kosovo Customs Service. Convinced that he has the right on his side, Shabani turned to the Municipal Court of Pristina, which in 2004 annulled the Customs’ decision to dismiss Shabani, ordered his reemployment and compensation for him.
According to Kosovo Customs Service Spokesman Adriatik Stavileci, the company’s director has compensated Shabani. However, his reemployment is impossible since, according to the spokesman, Shabani was dismissed from work due to violation of the code of conduct.
According to the statistics of the Ministry of Labor and Social Welfare, 20.000 jobseekers have added to the list of last year.
“Recession of workers in government institutions is made to avoid excess budget spending, and not by principles and analysis of cost-benefit. The worker reduction is not lead by clear criteria and objectives,” stated the Director of “Integra Consulting” and researcher of labor markets Avdullah Hoti.
The private sector has employed more people this year, in comparison to the public sector. But according to warnings of KEK to recess three thousand workers, and the Airport 200, the numbers will change for worse.
“KEK recession warnings will only impoverish the situation more. This is not the time to recess, this is not in accordance with the Government determination to alleviate unemployment and poverty,” stated Ministry of Labor and Social Welfare Spokesman Agron Bacaj.
“It would be better if the Government would draft a social program before beginning recession,” stated Chamber of Commerce External Relations Director Safet Gerxhaliu.
admin: Shkelqim Veselaj
Xhevat Ramosaj, currently in the office of the Permanent Secretary of the Ministry of Transport and Post-Telecommunications, has been appointed General Director of Kosovo Railways, reported Lajm.
According to Lajm sources, the KTA Board decided on Xhevat Ramosaj. “He has been selected for the position of General Director of Railways, but has not yet confirmed,” said the source.
“The PTK requires the return of tax on profit at the amount of €5m from the Tax Administration. In finalizing the balance, it was clear that PTK paid €5m more than required. This money has to be returned. As a result, the profit is much lower,” stated a source for Express. According to him, in order to avoid large penalties, PTK has paid more tax due to installments every three months.
PTK has been using the classic accounting systems until the end of 2004. Based on this system, a cash system available at the moment of balance closure may cause many errors and may even provide much more space for corruption. PTK officials do not give an explanation as to why PTK used this system and deny the reason of extra-profit tax.
“We have decided to implement the international accounting system starting from the beginning of 2004. The government request for tax on extra profit took place in 2005. Hence, we did not implement the system to avoid taxes. We implemented a professional obligation, a professional accounting that would minimize possibilities of corruption,” stated the source.
“The objective of tax administration is only to collect money. We are not against paying, but we will not pay in this form. The Government must find the right manner for our payment,” stated a senior PTK officer.
The Government had imposed tax on extra profits, benefited from monopoly back in 2005. At the time, the Government informed PTK it must pay around €15-30m tax. According to PTK officials, PTK is already paying around €700.000 tax for each quarter, which, calculated for a year, is 5 times less compared to what the government had requested.
Things were even more complicated with the bankruptcy of the Credit Bank of Pristina. “We will calculate tax on €15m when the money is returned. As for now, we are not sure if and how much of the money will be returned,” said the source. PTK’s declaration of a much lower profit is estimated to have further impoverished Kosovo Budget and may even drive it into a serious crisis.
With KPS assistance, a team from the Tax Administration of Kosovo has blocked the Tube Factory in Ferizaj for four hours and rummaged the offices due to unpaid obligations, reported Koha Ditore.
The debts consist of over €400.000 of VAT, increased by its late fees and interests. Nonetheless, for Factory Director Adem Metushi, the intervention is unacceptable. He admits that the debt amounts to €400.000, however disputes the fee rate. “TAK’s wish to sequestrate the factory with violence, no court proceedings or no notification for KTA, I must say, that is not a proper way of communicating,” stated Metushi.
The incident ended with the compromise that the factory will not close down until numerous issues are clarified, which is supposed to take place within next week.
“This is unacceptable. The employees will not allow to shut down their factory,” stated Head of Factory’s Labor Union Yzeir Qorolli. He is convinced that the KTA is making a great mistake in privatizing the factory without recognizing the employees’ right, won in court, regarding compensation.
Changes within KTA operational policies have been requested for quite a while, but to no avail. Even the European Agency for Reconstruction has reacted to suspicions of secret agreements and irregularities within the privatization process.
According to sources, the EAR representative at the KTA Board expressed his concern regarding this matter. He requested KTA members to be more careful and increase the deposit amounts so that withdrawal is prevented. Minister of Trade and Industry and member of board Bujar Dugolli, Head of BSPK Bahri Shabani, etc. have requested a change of policies.
According to Bahri Shabani, the fact that 45% of highest bidders have withdrawn in a single round is reason for concern. “More is required than to simply increase deposits. We must re-tender the enterprise in which highest bidders withdrew and the excess money can be given to KTA,” stated Shabani.
For the so-called Head of Economic Team for Southern Serbia and Kosovo Nenad Popovic, Kosovo is the region with the highest economic risk for world investors and with an “illegal process of enterprise privatization, in which property, and not the capital is being privatized and instead of being primary stakeholders, owners and creditors are left aside.”
Popovic said that during the next two to three weeks, the Serbian side will propose to UNMIK a new model of privatization, which in accordance with international standards, will be able to fulfill the requests of the Albanian and Serb side and attract foreign investors.
“It is not the time for an open and transparent privatization in Kosovo due to the fact that freedom of movement is not granted for Serbs and all other non-Albanian communities in Kosovo,” stated Popovic.
Popovic spoke of the “Grand Hotel”, in which case a Macedonian company deposited €600.000 and won the tender only to remain empty-handed at the end. He also claims of having discussed the future privatization of “Trepca” with World Bank representatives. “We share the opinion that is not the time for the privatization of Trepca. Kosovo’s status should first be solved and then privatization can take place according to models conducted in Czech Republic, Hungary, Poland, Serbia, etc,” stated Popovic.
The Albanian “EuroDrini” company in cooperation with staff of the Grand Hotel sent a letter of complaint to KTA, following which the issue of the hotel’s privatization was passed to the Kosovo Special Chamber of Supreme Court, reported Lajm.
“KTA is expecting the results of the complaint and of the investigation of winning company activities, all of which are being conducted by Pillar I,” stated KTA Spokesman Ekrem Tahiri.
The complaining sides have also requested that KTA exclude the second highest bidder from the tender. According to the letter of complaint, KTA cannot qualify the bidder due to his lack of regular documentation. “…both partners lack hotelier experience .”
“… Complaints are only natural. KTA has told me that everything is okay,” stated Zylqyf Berisha, provisional winner “Union commerce”. According to him, KTA has already provided him with a draft contract and he is expected to sign during next week.
The KTA Board of Directors approved the 16th wave of privatization, in which the privatization of 16 SOEs will lead to 33 NewCos. The Board also agreed to establish a technical committee for the appointment of an international administrator for Trepca, reported the dailies.
“We have decided that the council will consist to a great part of representatives of the PISG, important Trepca stakeholders, UNMIK and KTA, all of which will advise the administrator,” dailies quote the Head of UNMIK Pillar IV, Joachim Ruecker as saying.
The KTA Board rebuked media claims regarding the approval of a strategy, which foresees the Serbian government to be equal to the Kosovo Government in regards to the privatization of Trepca.
“The KTA is only discussing strategy drafts. Surely, privatization lines are obvious,” RTK quoted Ruecker.
Minister of Trade and Industry and KTA Board Deputy Chairman, Bujar Dugolli, said: “Regardless of attempts to impose a third factor here, Kosovo institutions will have the last word on this matter. There cannot be a third factor and we would not acknowledge any factor other than the local and international ones.”
KTA Board announced the temporary winners of the textile factory “Yumco” and declared its recent privatization by the Serbian Government as illegal. According to RTK, multimillionaire Behxhet Pacolli’s internationally known company “Mabetex” bought Yumco for €4,1m from the Serbian Government only to withdraw from the contract following a letter sent to KTA, stating that it recognizes any decision reached by KTA.
“If I am well-informed, the problem for “Yumco” was illegal tendering committed by the Serbian Government. This was corrected and in accordance with KTA privatization rules, the provisional winner was announced,” said Ruecker.
Dugolli said: “Any offer of selling or purchasing Kosovo property out of Kosovo institutions is absolutely unacceptable. I believe that the Board today has unanimously reached a decision not to recognize any other privatization procedures regardless of who the purchaser is.”
KTV quotes Dugolli as saying: “KTA announced that it (Yumco) was allegedly sold out of Kosovo but, whatever happened, the risk is with these persons that entered these adventures, it is not KTA’s fault.”
The KTA Board also said they are expecting a response from KTA Special Chamber, which would explain the entire procedure of Grand Hotel.
Minister of Energy and Mining, Ethem Ceku said at a public debate on Thursday that the construction of the new power plant, Kosovo C, would begin in 2008.
“By the end of the year we plan to select the private investor for the energy sector,” said Ceku. “The construction of the new power plant will be divided into two phases: in the first phase (2008-2012), a unit of 1,000 MWh will be constructed, while in the second one (2012-2020) a unit of 800-1,100 MWh.”
According to Ceku, this €2 billion-project will result in increased budgetary revenues, better living standards and 1,300 new jobs. “It is estimated that the project will provide a €600,000 turnover rate, while the Kosovo Budget will benefit from €150 million per year,” said Ceku.
Ceku also said that this is the biggest project in southeastern Europe, which would turn Kosovo into an energy exporter.
UNMIK Pillar IV Chief, Joachim Ruecker, said that cash collection is the most important element that would help improve the energy situation in Kosovo. “This would enable KEK to finance many necessary investments,” said Ruecker, adding that the opening of a new mine in Sibovc is one of the challenges KEK will face in the near future. “We all agree that the energy sector is crucial for the economic development,” said Ruecker.
Pranvera Dobruna-Kryeziu, KEK Deputy Managing Director, said that Kosovo needs more electrical energy than it is producing as the energy consumption is increasing every day. She called on all customers to pay their bills, since this is a very important thing to attract foreign investors in the energy se
ctor. In an interview with RTK, Minister Ceku said that almost the whole legal package that has to do with the establishment of a basis for involving the private sector in the area of energy and all necessary studies have been finished.
Kanthan Shankar, World Bank Director in Kosovo said that one of the proposed thermal plants has potentials in two main aspects. The first is a long-term sustainable source of income for development programs and civil services, while the other is an opportunity for stimulating trade with South Eastern Europe.
Following a PDK caucus request for the interpellation of Minister of Transport and Post Telecommunication Qemal Ahmeti, who was criticized harshly for the road situation in Kosovo, a debate took place at the Kosovo Assembly.
The opposition asked Ahmeni various questions during the session. PDK Assembly Member Jakup Krasniqi criticized Ahmeti for not providing further details regarding the road situation.
“The Ministry should have informed us on the impact the holes have on Kosovo highways, traffic and accidents,” said Krasniqi.
Ahmeti reported that the road tax fee goes into the Kosovo budget and is not directly allocated to the Ministry for road maintenance.
Assembly Member Naim Maloku blames the Law for the roads, which impeded the allocation of a special fund to the Ministry. He suggested the modification of this law so that the road tax fees would be available to the Ministry. LDK Assembly Member Alush Gashi said that the LDK caucus is engaged in increasing funds, maintaining and building the infrastructure in Kosovo.
According to MEF’s Quarterly Financial Report 2006, the telephone expenses were divided into two categories: phone bills and other phone expenditures. The first category includes all phone calls, landline and roaming. Some of the spending agencies spent a huge amount of money to purchase phones.
The Assembly, President’s Office, the PM’s Office, the Ministries, and the Municipal Assemblies spent €603,200 only for phone calls.
According to the report, the Assembly spent more than €23,000, the President’s Office €17,000 (including a purchase of telephones €1,500); PM’s Office €70,000 (including purchase of phones, €3,200); MEF €81,000 (€870 for telephones); MPS €35,000; MAFRD more than €18,000; MTI €30,000; MTT more than €60,000; MoH more than €51,000; Ministry of Culture and non-Residential Issues €90,000 (€5,000 for telephones); MEST about €38,000; MLSW more than €17,000; MESP about €50,000 (€3,500 for telephones); Ministry of Local Government €9,200; MEM €14,000.
The Municipal Assemblies spent €237,600, the Independent Procurement Commission €10,000 (€5,490 for phones); the Academy of Sciences and Art €2,900; TRA €3,300; UNMIK Customs €26,000; the Office of General Auditor €4,500; the Directorate for Administrative Issues €12,700; TMK’s Coordination Office €7,600; KPS €110,000; the Justice Department €68,000; Prison Services €10,000; the Kosovo Police School €460,000; KTA €7,800; the Water Regulatory Office €509; CARO €4,200; ICMM €6,800; ICM €3,100; CEC €1,000; the Office of Ombudsperson €6,200; KJI €1,800; the Office for Communities €1,600.
The tax on monopoly might not be able to enrich the Kosovo Budget with over €30m. According to PTK officials, PTK has already paid €700.000 in last year’s first quarter and another €2.8m are expected to be paid for the entire year.
The Monopoly Tax Regulation was approved last year and its application began in 2005. Taxes are imposed on all companies with a turnover of over €100m and with a monopolistic position in the market.
Based on the declared profit of €8m, PTK paid €700.000. “Apart from contradicting European laws, PTK is not a monopoly. Our estimate is that our other two operators [063 and 064] have 250.000 subscribers. Hence, competition is large for us,” stated PTK Legal Issues Director Genc Lami.
“Legally, PTK is a monopoly. Practically, Mobtel and 064 operate in Kosovo. If we refer to European norms, the monopoly is a violation of European rules,” stated the Head of TRA, Anton Berisha.
Under the headline In 2005 PTK earns €45 million less than in 2004, Koha Ditore reports that based on PTK’s Financial Report 2005, the PTK’s netto profit in 2005 is much lower than in 2004. According to these data, the profit in 2005 was €2,36 Million, while in 2004 it was €47,778 Million, or €45 million more.
In addition to profit decrease, the PTK has had large increases of operational expenses, staff expenditure and other expenses. Expenditure for staff salaries has increased outstandingly – from €19,044 million in 2004 to €32,506 million in 2005.
Operational expenses have increased from €18,03 million to €25,06 million.
The Director of Vala 900, Driton Halili, promoted the new international service of SMS. The project is part of the implementation of the first part of the fourth phase of the development of Vala 900. “It is an important step for efficient and transparent services for Vala 900 clients. It is important that this new service has the same price as the local SMS [€0,13] and is automatically offered to Vala 900 customers,” stated Halili.
During the five-day promotion phase for sending Vala 900 SMS to worldwide international operators, Vala 900 client sent over 104,000 messages. “Vala 900 can exchange SMS with 188 countries through 542 operators,” said Halili.
Vala 900 fourth phase plans to build a network capacity for 700,000 clients and cover 99% of Kosovo’s territory.
Meanwhile, Koha Ditore reads that the late President of Kosovo, Ibrahim Rugova, will be the first personality to appear on PTK postal stamps. According to PTK Information Officer Anita Thaçi, the stamps will be published on the International Day of Peace, on September 21.
Within the year, PTK will also issue a postal stamp with a sculpture of Academic Sculptor Agim Çavdarbasha. Thaçi said that the decision was reached by the Postal Stamps Senior Commission, which is comprised of delegated representatives of art, science, history, culture and sports institutions.
“It is worth mentioning that apart from the nominated Senior Commission of Postal Stamps, all citizens are entitled to give their suggestions for postal stamps to the Ministry of Transport and Post-Telecommunications,” stated Thaçi.
On Thursday, former employees of the “Perparimi” Brick Factory in Skenderaj have blocked the KTA main entrance and requested an explanation as to why they have not yet received their 20% share, reported Lajm.
“Leave your phone number with us and we will call you as soon as the money is ready,” said Liquidation Officer Dennis Garlan, adding that it is impossible to set a time for the allocation of the money due to this being a decision of the Supreme Court.
Head of Engineering Union Avni Hajdini claims KTA officials have violated all regulations. “The list was drafted in May last year and the money should have been provided within 60 days. An entire year has passed since then. It is irresponsible,” stated Hajdini.
Employees threaten with radical protests if the KTA does not fulfill their requests.
Most daily newspapers quote EU Envoy on Status, Stefan Lehne, as saying that it would take Kosovo a long period of time to join the European Union. “The EU has promised the region a perspective to join it. But the EU has also set clear conditions for such a thing. These conditions must be met and then we will commence with the Stabilisation and Association Agreement. Kosovo is clearly several years away from achieving these principles,” said Lehne, commenting on Kosovo’s timeframe to join the EU.
Koha Ditore quotes Lehne as saying that only responsible leaders can get Pristina closer to Brussels. “The process of rapprochement with the EU is more important than the timeframe, because it helps develop the institutions, to prepare the legislation and to create institutional structures for a self-sustainable country that can move toward EU ascension successfully,” Lehne said.
Zëri also highlights Lehne’s quote that the process of meeting the criteria for membership is more important than the timeframe. The paper also quotes Lehne as saying, “I have strongly encouraged Mr. Thaci and the entire Negotiations Team to continue to be constructive in the status process and to make proposals in the future agenda of talks in Vienna to prove that the interests of the minorities will be taken into account.”
The daily press notes that Lehne has arrived in Pristina as part of the preparations to open a new round of talks between Pristina and Belgrade on economy. Yesterday morning Lehne met the opposition leaders and the representatives of Kosovo Serbs.
KTV quoted Mr. Lehne as saying: “Several conditions have to be met for starting the talks on the stabilisation association agreement. It is clear that Kosovo is several years away from meeting this objective. The process itself is more important than the duration. You are moving towards Europe; you are developing your institutions; you are adopting legislation and preparing the entire structure for this objective. This will be a long process for Kosovo as it was for other SEE countries, but I think political leadership possesses energy for achieving this.”
Compared to the same period last year the first quarter 2006 has marked a decrease in revenues and an increase in expenditures, Ministry of Economy and Finance (MEF) officials said yesterday while presenting the Quarterly Financial Report 2006.
According to the report, €137,720 million was collected, while €103,099 million was spent. Based on these figures, the plan on revenue collection was not implemented as planned, since only 81,5% of the planned revenues was collected.
Lulzim Ismajli, Head of Department of Treasury at MEF, said that the Pristina-Skopje highway, which was closed for several weeks, was one of the elements that affected the revenue collection.
In this period, the expenditures for salaries and daily allowances were 3,5% higher than at the same year last year; expenses for goods and services were higher for 8%, while the subventions and transfers were lower for 10,8%.
The data on capital expenses reach the value of €8,74m. The central Government spent €6.55 million, while municipalities spent €1.18 million.
According to MEF officials, if revenue collection continues at this pace there will be a budgetary deficit in 2006.
The Head of the Economy and Finance Department at the Shadow Government, Bedri Hamza, said the budgetary deficit 2005 was a consequence of the weak management of the Kosovo Government.
According to Hamza, the MEF’s Fiscal Year Report 2005 did not cover self-generated revenues incomes, especially in the municipalities, where only €24 million out of €35 million. were collected.
The Ministry of Transport and Telecommunication has extended the deadline for the tender for a consulting company on mobile telephony to May 23. MTPT officials said that so far only four international companies have applied for this tender.
MTPT Spokesperson, Shefki Ukaj, said there would be no additional postponements. He added that besides the wining consultant company, the commission would also comprise representatives of MTPT, TRA and the Government.
According to Lajm, PTK has manipulated its tax declaration several times in 2005. The Kosovo Tax Administration ordered an audit due to its conviction that the tax law was violated. If this turns out to be the case, PTK will have to pay a fine of €2m.
The first manipulation deals with PTK’s €15m at Credit Bank Pristina, a sum which PTK declared as having been spent.
“Declaring the sum spent is a violation of tax. The case took place in 2006; hence, the sum cannot enter the balance of 2005. According to the law, the tax administration does not acknowledge such loss unless its is proven by court. Further yet, six months have to pass once the court declares them as being lost,” stated a tax administration official.
The second manipulation is regarding the budgetary position of the Additional Pension Fund. PTK pays more than the usual 5%. Hence, €15m were withdrawn from profit.
“This is a violation of law especially for the funds accumulated during 2002, 2003 and 2004. Only the payments for the year 2005 [when the new law was approved] can be taken from profits,” said the expert.
The third manipulation concerns the means of amortization. In 2004, PTK declared that €16m was used for amortization. For 2004, the amount rose to €20m. “This took place due to an audit conducted by a foreign company. It is understandable and acceptable for a company to raise the value of assets for the sake of business. However, as far as taxes are concerned, this increase has no value,” said the expert for Lajm.
The KEK Trade Union (SPEK) reacted to the statements of KEK Deputy Managing Director, Pranvera Dobruna, that about 3,000 workers would be laid off in the next four years.
“Unfortunately, Dobruna does not think with her own head, but reads the plans of her predecessors. This way, she is pushing the company towards a catastrophe,” stated SPEK President Izet Mustafa for Lajm.
According to unionists, Dobruna should try to find alternatives to dismissing people from work. First, she should try to understand the amount of money KEK managers spend. “If there should be employee cuts, then she should start with the managers,” said Mustafa.
Lajm reported on the unionists’ conviction regarding risking a direct conflict if the relations between employees and managers do not change for the better. KEK Spokeswoman Donika Kadaj-Bujupi did not wish to comment unless official complaints are made.
According to the Auditor General’s report, there were irregularities in the implementation of procurement procedures and financial managing in Kacanik municipality.
The report indicates that the procurement office did not manage to totally work in accordance with the applicable laws and regulations and that the internal control system is not functioning properly.
The auditor recommends to the municipality to immediately undertake measures in order to improve the situation.
The International Airport management of Pristina Airport presented its Investment Project Plan to the Head of Pillar IV Joachim Ruecker, reported Koha Ditore. The plan includes runway resurfacing, lighting, perimeter fencing, circular road, and terminal modification.
"I have been informed of the Airport’s achievements and we had a comprehensive exchange of opinions regarding the developments,” said UNMIK Pillar IV Chief, Joachim Ruecker. “I was informed that the plan includes the reconstruction of Departure Area and Cargo Hall, which will be turning into a new Arrival Area. Thus, the International Airport of Pristina will be modernized.”
According to Ruecker, projects necessary for certification are underway. "Funding represents a problem. However, we are holding talks with EBRD regarding the allocation of a loan, which I consider to be a strong economic basis. The airport has a very promising future. There are no obstacles evident," stated Ruecker. Koha Ditore also reports that EBRD may allocate a loan amounting to €36 Million.
Meanwhile, General Director of Pristina Airport, James Johnson said, “As soon as we conclude the external audit at the airport, we will proceed with an overall report, which we expect to be in accordance with the law. Naturally, during my stay here everything will be in accordance with the law.”
Ruecker defended the construction of Rexhep Zeka’s hotel, Lajm reports. Although the hotel contradicts the Airport’s Master Plan, Ruecker pointed out that its construction is entirely legal. "The establishment of the hotel is in accordance with laws in power. The dynamic nature of the master plans is such that they constantly change. Pristina Airport needs a hotel," Lajm quotes Ruecker as saying.
According to Lajm, the construction of the hotel was well known since the beginning. None of the other families received such compensation. Several were even arrested when attempting to block the road. "The Zeka family agreed to interrupt and prevent all activities that may prevent the construction of the road to the Pristina Airport. Under the condition that every facility will serve the airport and be in accordance with the law, UNMIK assures the Zeka Family support for any contraction this family decides to undertake," stated the agreement.
RTK reports that the contracts of 33 workers were not extended lately. None of the workers knows the reasons for their dismissal. All of them had more than three-year experience.
“Management is actively looking at the issue of economic business in the Airport and in this context the number of the staff at the airport is being reviewed,” said Ruecker.
Johnson said that “The contracts are being reviewed and we are looking at two concepts: one is that we have terminated the contracts to some civil servants, due to some reviews that we as the management are making. We continuously follow the situation at the Airport and the importance of the workers and due to this we did not extend the contracts of 33 workers.”
The officials of Pristina Airport do not say the number of the workers that will be laid off. However, they say that there will be more lay offs in the future since there is over-employment at Pristina Airport.
According to TV21 sources, more than 100 workers will be laid off until the end of the year.
As part of his weekly address to the citizens of Kosovo, PM Agim Ceku focused among other things on the fight against corruption.
“Last week I promised you that will work strongly on a ‘zero tolerance’ to corruption,” the PM said. “Serious actions have started in this regard and I ask for your understanding, patience, support and dedication to this long and unstoppable process. This commitment in the internal plan will not be an obstacle to reaching our objectives in the external plan: relations with the neighboring countries and the world. And this is what I am going to talk about today. I would like to assure you that the Government has a clear vision in terms of Kosovo’s role in the region, first of all in terms of the relations with our closest neighbors.”
The Silkapor Company from Hani i Elezit has paid €8.1 Million for the privatization of Grand Hotel to the KTA accounts, the KTA press office confirmed.
The third bidder in the tender on privatization of Grand Hotel, the Grand Group, sent a letter to KTA and UNMIK Pillar IV Chief, Joachim Ruecker, reminding them of “violations during the pre-qualification during the privatization of Grand Hotel.”
"The Grand Group has asked the KTA to review the documentation of the provisional winner and to offer transparency in this procedure,” a press release of the Grand Group reads.
“Our interests have been affected, since the pre-qualified company fails to meet the tender criteria. We posses information that these procedures have been violated in the case of Grand. These poor practices make the KTA a real estate agency and not an agency for enterprise privatization.”
The Silcapor Company promised to hire 540 employees and invest €20 million in a two-year period.
The Auditor General’s report on 2004 indicates there were violations of procurement procedures in Klina municipality.
The report reads that the municipality has misused the method of emergent procurement, there were unauthorized procurements, while cash payments and expenses exceeded the determined limits. Moreover, the internal auditor failed to prepare the annual procurement plan.
According to the report, about 47% of the €1,848 million municipal budget was spent in December 2004 only.
Due to its highest sum offered, the Kosovo Trust Agency Department of Privatisation recommends accepting a bid made by a Kosovar at the Serbian Privatisation Agency regarding the purchase of YUMCO Enterprise. The submitted bid exceeds the other bids with the amount of €4.1 million, reported Koha Ditore.
The Privatisation Department issued a letter to KTA, following which the KTA presented a motion reinstating its jurisdiction over the wealth, and as a consequence, the Serbian tender was cancelled. However, according to “legal advice”, KTA contacted the Serbian tender bidder and regardless of its non-participation in regular tendering procedures, KTA offered to sell “Yumco” for €4.1 million.
According to KTA Board sources, the issue of YUMCO was discussed during a recent meeting and will once more be discussed on the 15th of next month. "All I can say is that I am against the legalisation of selling Kosovo enterprises through the Serbian Privatisation Agency," said Minister of Economy and Finance, Haki Shatri. BSPK President Bahri Shabani shares his opinion “…regardless of the sum offered”.
Pillar IV Spokeswoman Mechthild Henneke said that "The bidder's identity is confidential and the KTA Board is preparing a reply to this issue. As soon as all aspects of this issue are reviewed, we will publish a decision.”
The document issued by the Department of Privatisation reads: "In order to ensure that assets are not sold for less than their true value, KTA followed legal advice, after which it offered the bidder to purchase Yumco if it is still willing to pay the offered sum…”
NewCo Yumco Factory LLC and NewCo Yumco Land were tendered as two separate enterprises in the tenth round. Two offers were made; €1.7 Million and €277,000. As a solution to this, the Department of Privatisation revealed several options, including their advantages and disadvantages, reported Koha Ditore.
The first option is to accept the highest offer, €4.1 million. The advantage in this case, is the high price and the fact that the enterprise would be sold at its true value. On the other hand, it would be interpreted as a "this way, we would expect many more offers by the Serbian Agency for Privatisation, thus, we would risk to be sued for changing the rules. We should be able to explicitly acknowledge this offer as a policy of cooperation with the Serbian Agency in cases when the tenders may not have higher results," said the Department of Privatisation document.
The second option would be to refuse the offer of €4.1 million and proceed with the regular tender, thus following standard procedure. The third option deals with re-tendering. Although the latter is in accordance with current procedures, the danger of receiving much lower offers is evident, reported Koha Ditore.
KEK has turned into a retirement home and the employment of younger generations is not possible unless the old generation is sent away. Regardless of the efforts of KEK officials, it is quite difficult to find a less painful way for their removal, reports Lajm.
The average age of the employees is 45 years of age, which is quite old for a corporation that claims to function in accordance with European standards. "We do not expect to employ young people this year. If we do, what should we do with the old ones? As far as the older employees are concerned, we have offered them two options of voluntarily ending their employment. The first option would be to take early retirement. The other option is to sign an agreement regarding the end of their employment, thus receiving some benefits,” said Head of KEK Directorate of Human Resources Bajram Hasani, reported Lajm.
Hasani also told Lajm that these two options enable staff reduction without using forceful dismissal.