Helene Ryding Blog

EBRD to concentrate on Balkans -SEEUROPE

Helene Ryding — Wed, 17 May 2006 03:47:00 GMT

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.

European Commission: One part of EU standards should be fulfilled in local level-KOSOVALIVE

Helene Ryding — Wed, 17 May 2006 03:46:00 GMT

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.

Tax Evasion at Northern border causes significant damages to Budget-KOSOVALIVE

Helene Ryding — Wed, 17 May 2006 03:45:00 GMT

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.

PDSRSG backs plan for construction of new power plant-KOSOVALIVE

Helene Ryding — Wed, 17 May 2006 03:45:00 GMT

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.

MTPT licensed four post operators-KOSOVALIVE

Helene Ryding — Wed, 17 May 2006 03:44:00 GMT

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.

Businesses oppose excise on nonalcoholic drinks (all TVs, most dailies)

Helene Ryding — Tue, 16 May 2006 16:01:00 GMT

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.

Energy situation in Kosovo (TV21, Weekly programme, “Standardi Ynë”)

Helene Ryding — Tue, 16 May 2006 16:00:00 GMT

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.”

Low quality oil sold in gas stations throughout Kosovo (KTV, dailies)

Helene Ryding — Tue, 16 May 2006 16:00:00 GMT

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.

Government refers a good citizen to Ruecker (Koha Ditore)

Helene Ryding — Tue, 16 May 2006 15:59:00 GMT

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.

KEK is not accepting workers anymore (Lajm)

Helene Ryding — Tue, 16 May 2006 15:58:00 GMT

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

PTK requests €5m from Tax Administration (Express)

Helene Ryding — Tue, 16 May 2006 15:57:00 GMT

“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.

Appointed Director of Railways - Xhevat Ramosaj (Lajm)

Helene Ryding — Tue, 16 May 2006 15:57:00 GMT

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.

Kosovo Tax Administration demands money from Tube Factory (Koha Ditore)

Helene Ryding — Tue, 16 May 2006 15:56:00 GMT

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.

EAR criticizes KTA (Iliria Post)

Helene Ryding — Tue, 16 May 2006 15:55:00 GMT

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.

Belgrade charges for enterprises transferred to Kosovo courts (Koha Ditore)

Helene Ryding — Tue, 16 May 2006 15:55:00 GMT

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.