SNS Party Questions Planned Sale of Gas Utility

Chairman of the nationalist SNS party, Andrej Danko, is accusing the government of being in cahoots with the potential new owners of a 49% stake in gas utility SPP, meaning it will be sold off cheap and the country will lose out.

At a press conference yesterday, Danko announced how the SNS party is lodging a petition with the Attorney General on suspicions that the law is being violated as the state is not exercising its right to first refusal to the 49% stake in Slovensky plynarensky priemysel (SPP). Danko noted how a cloak of secrecy surrounds the planned transaction, saying it was not at all easy getting to information about the current status.

“I believe that the Attorney General SR is authorised and, considering the importance of the transaction, even obliged to check the circumstances under which the changes to the ownership structure of the company Slovak Gas Holding B.V. (SHG) are being made,” Danko cites, saying above all it should check whether the state exercised its right or not, how much it offered and if the offer was rejected. SHG is owned equally by E.ON Ruhrgas AG and GDF Suez S.A as the vehicle company for the investment.

Danko also wants the Attorney General’s Office to check  whether the change to the ownership structure of the company Slovak Gas Holding B.V. will be made for the same amount. “We remember how Robert Fico stood before the gates of SPP and declared that the privatisation of SPP was the biggest rip-off and that it had been sold off like a refrigerator”, Danko notes, saying Fico built his whole political career on attacking former finance minister Ivan Mikloš over it.

Although at that time Fico said that the 49 percent stake in SPP could have been sold at double the price (it was sold for around EUR 4.3 billion), now the stake could be let go for just EUR 2.5 billion, according to estimates in the media, this with the endorsement of Fico’s government, which seems more concerned with using the negotiations to gain managerial control over the company and the lucrative transmission system, operated by subsidiary Eurostream.

“The state will not receive a single euro for failing to apply its pre-emptive purchase right”, declared Danko, adding how the state is just keeping quiet about the situation, with the only argument for not buying the stake being a lack of money. Danko reckons the ROI on the estimated purchase price is just six years, referring to it as “a golden egg”.

The main argument put forth by Danko is that if the state were to acquire the shares, the money it would gain from the EUR 700 million or so in annual profit could be used to cover “the salaries of teachers, doctors and health workers”, for instance, adding that “everyone can do the maths”.

In response to the excuse that the state doesn’t have the money to buy back the gas utility, Danko pointed to the EUR 500 million the government has set aside for the “crazy deal” of buying up private health insurers, while the Ministry of Finance recently raked in EUR 1.2 billion from a 12-yr bonds issue, so a similar issue could be used to cover the acquisition of the stake in SPP, instead of letting it slip into the private hands of financial groups.