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Kosovo: "The legalization of the illegal by the KTA Board"


Prishtinë, Apr 12, 2006 - By deciding to sell the two most important socially owned hotels in Kosovo, the Kosovo Trust Agency (KTA) Board has given the final kick to the legality and justice in the privatization of socially-owned property in Kosovo, Koha Ditore writes.

All members of the KTA Board, apart from Bahri Shabani, representative of the workers, once more legitimated the practice of the withdrawal of the most important bidders from the purchase of the socially-owned enterprises.

In a way, they confirmed many allegations and facts published by the media, regarding secret agreements, price set ups, where reportedly KTA officials were also involved.

The highest authority of privatization legalized the corruption of the privatization process. Grand and Iliria, big names for two hotels which have been left out of maintenance for fifteen years, are not the first cases of legalizing such practices, and it seems they will not be the last cases either.

These two cases, however, could have served to end the to date practices of privatization. While other cases were kept quiet, this time the Kosovo society has openly asked to bring the practice of corrupting this process to an end. The members of the KTA Board have once more convinced the Kosovo society that they do not want to be a part of it.The obligation of the KTA Board, comprised of senior UNMIK officials and ministers of the Kosovo Government, is to prevent any possibility, or suspicion of secret agreements and corruption of the process, but the opposite has happened. Such a compromise should not have been made for any reason, let alone to fulfil the stated mission for a speedy sale of the SOEs. The acceleration of the sale, in this way, deviated from social interests to personal interests of the members of the KTA Board. The KTA Board did not have the right to sell any of these two enterprises. By selling these two hotels, it has breached the principles of privatization, established at the United Nations Security Council. KTA Board representatives had said that bidders who withdraw from one enterprise would not be allowed to purchase another enterprise. This decision was not obeyed last week. The Makos consortium withdrew from the privatization of Grand Hotel, but bought Iliria Hotel. It seems that the threat allegations were only a justification not to lose the €500.000 deposit.

On the other hand, the two bombs placed around the Grand Hotel are also concerning, although there is no relation (yet) with the privatization process.

Another violation of principles is the privatization of enterprises, which are tendered through special spin-off to companies, which are not of the same background. In the case of Grand and Iliria, privatization should give an opportunity to those who are experienced in running hotels, but such principle was not obeyed either. In the case of Grand the main partner in the consortium is a construction company, with a complete lack of experience. The other smaller partners in the consortium might have some experience, though unimportant, as the largest partner carries the main burden.

The fact that the Grand management has been supportive of the sale of Grand to the second highest bidder, but categorically refused the sale to the first bidder, is also very interesting. The Grand management itself bid for the privatization of Grand, but they only had the third highest offer. The refusal of the first bidder and the support for the second bidder creates suspicion of a secret agreement between the second bidder (Silcapor) and the third bidder (the Grand management and EuroDrini). The KTA Board however, does not want to notice or discuss these suspicions, even though they are very obvious.

The objective of the KTA Board members, starting from Joachim Ruecker, is to fulfil their personal purpose - the speedy completion of the privatization process. The legalization of illegality is not more important than the comfort of their personal CV-s. As for the development of the country, they haven’t thought about it for a long time, writes Koha Ditore in an opinion piece regarding the privatization process in Kosovo.

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Background information for foreign investors

Kosovo: General Information
Kosovo: Key economic indicators
Why do business in Kosovo?
Legal Framework in Kosovo
KTA and Privatisation in Kosovo



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