THE SCANDAL OF THE TRANSFER OF 13% OF THE PORT OF CONSTANŢA TO THE LOCAL COUNCILDumitru Costin suspects Dutch or Russian interests when it comes to the Constanţa port

VLAD PÎRVU (Translated by Cosmin Ghidoveanu)
Ziarul BURSA #English Section / 20 mai 2014

Dumitru Costin suspects Dutch or Russian interests when it comes to the Constanţa port

"If we develop Constanţa, Rotterdam will be affected", the union leader says

Hundreds of unionists have protested against the transfer of a 13% stake in the Port to the Local Council

Mazăre told the unionists they are being paid off by businesspeople Corneliu Idu and Gabriel Comănescu

Suspicions concerning foreign interests are once again being brought up, following the proposal to shift a 13% stake of the Port of Constanţa from the Ministry of Transports to the Local council, an issue which sparked a huge scandal and has caused hundreds of employees of the port to take to the streets to protest the move.

Dumitru Costin, the president of the National Union Block (BNS), once again brings up the issue of the Dutch interests, who would want to prevent the Port of Constanţa from developing, as that would harm the interests of the port of Rotterdam. This topic has been discussed in 2012, when PSD senator Marius Bota was saying that "Holland is blackmailing Romania with the accession to the Schengen, in order to get private control of the Port of Constanţa quicker and with better terms through private management".

Dumitru Costin yesterday said: "The port of Constanţa represents more than a simple business, as the implications are far higher. This is not a question of coincidences.

The competition has been sabotaging us for years. And when I say competition, I am not referring to Agigea, Tulcea or Brăila. We are part of a very sensitive geopolitical system. The modernization of the Port of Constanţa can upset some entities. It could represent the main gateway to the EU. If it were working as it should, it would reduce the traffic of goods through the southern and western channels. If that happened, what need would the Asians have to go to Rotterdam? If we develop Constanţa, then Rotterdam gets hurt. I didn't mention Rotterdam for nothing. The discussions that we had in the past about the influence of the Dutch on the port of Constanţa were more than just talk. It would have been laughable to hand over the management of the Port to them, its main competitors. Then they made another smart move, they came up wit the strategy to develop the ports located along the Danube, as part of the European project for the Danube Strategy. Let's also remember how vehemently Holland opposes our accession to the Schengen space. It is a very important battle. You do realize, the majority stake in the Port of Constanţa could end up under the control of the Russian or of the Dutch one of these days".

Other voices claim that the move to transfer the ownership of the 13% stake to mayor Radu Mazăre would serve the Russian interests, as Gazprom Neft, the oil division of Russian giant Gazprom, has acquired the bunkering (ship fueling) operations of the port of Constanţa, owned by Unicom Holding through Marine Bunker Balkan S.A.

Last summer, amid the negotiations for the privatization of "Oltchim", the list of investors interested in the privatization included TISE, of the Gazprom group. At the time, sources close to the talks told "BURSA", that TISE would have indeed agreed to acquire "Oltchim", but only bundled with the oil logistics of the Port of Constanţa (OIL Terminal), with Conpet, the Arpechim refinery and the thermal and electricity sources for the Oltchim Râmnicu Vâlcea platform and the Arpechim platform of Piteşti.

The Proprietatea Fund: "The move to a more balanced shareholder structure represents a positive development"

The Proprietatea Fund, a shareholder which holds a 20% stake in the Port of Constanţa, expresses its agreement for the transfer of 13% of the shares going to the Local Council.

Grzegorz Konieczny, Fund Manager of the Proprietatea Fund, told us: "In our opinion, in any company, the shift towards a more balanced shareholder structure, where there is no dominant shareholder, represents a positive development".

According to the proposal of the Government and of the local authorities the shareholder structure of the APM would be the following: the Constanţa Local Council - 33%, the Ministry of Transports - 33%, the Proprietatea Fund - 20% and 14% of the shares would be listed on the Stock Exchange.

"The proposal to list 14% of the company is a significant improvement compared to the initial proposal to only list 5%", said Grzegorz Konieczny. "This more significant stake should make the deal more attractive to investors, but ideally, the stake on offer should have gone to about 25%".

Dumitru Costin considers that the Proprietatea Fund is only interested in money: "The Proprietatea Fund can hardly wait for the money, they are not interested in anything else. All that talk about durable development and other things is just that: talk".

The meeting between Mazăre and the unionists yielded no results

Dumitru Costin also told us that the people who actually work in the port of Constanţa are the most entitled to complain, after the employees of the port yesterday protested in front of the headquarters of the Administration of Maritime Ports: "We support them. We tried to talk to minister Şova (ed,. note: Dan Şova, the minister of Transports), with arguments, but in the end the decision was a political one, which ignored any technical or juridical arguments, as is easily seen".

The union leader also told us: "Our actions will go as far as stopping work for an unknown duration, and that will have a major impact on the economy. Look at the port of Brăila, which was given to the local authorities, in 2001-2002. What happened to it? Traffic tumbled dramatically, instead of growing. The port of Tulcea was also privatized. Can you guess what happened to it?"

Mazăre: "If I wanted to do business in the port, what was there to stop me, especially now, when our people are in the government?"

Yesterday's meeting between mayor Radu Mazăre and the unionists of the National Federation of Port Unions, which is opposing the idea of the state giving away its majority stake in the Port of Constanţa, yielded no result. The two parties hurled accusations at each other, with the mayor telling the unionists that they are defending the millionaires doing business in the port, while the unions accused him of strongarming the people who signed in favor of the transfer of the shares.

When asked by the journalists whether it could not be suspected that he has a personal interest in the Port of Constanţa, Mazăre said that, had he wanted to do his own business in the port, nobody could have stopped him, especially now that the PSD controls the government: "You can suspect me of anything, including that I wear high heels. Had I wanted to have my own business in the port, what could have stopped me from doing it, especially now? Am I not a friend of Şova, don't our people have control of the government? It's always been like this: people who have control of the government do business in this port", said Mazăre, quoted by Mediafax. He went on to say that he did not, does not and will not have any personal business in the Port of Constanţa.

The mayor told the people who were present that the port has not developed properly in the last 24 years and expressed his surprise at the unionists' protests. "I am surprised that you have initiated a protest against the transfer of the shares to the mayoralty, because in my opinion, over the last 24 years the port has not developed as it should have. If we took a walk through the port and through Mamaia we would find that there is a huge difference when it comes to investments, development, newly created jobs. You are worried you are going to lose your jobs, but our interest is to increase the number of jobs and investments in the port", said Radu Mazăre. He also said that the local administration had no say on the way the port was managed after it received 20% of the shares in 2008 and that all the decisions concerning the port were made by the Ministry of Transports: "We didn't have any say on the port since we received that 20%. The decisions have been made by the Ministry of Transports and they haven't been the best. The port should have been booming just like the resort of Mamaia, where the number of jobs has increased three times and where we can see investments from the Mayoralty, using European grants, as well as those made by private businesses. The number of investments in the port has decreased, whereas in Mamaia it has increased. In 2000, when I became a mayor, there were 10,000-12,000 employees in Mamaia during peak season, now there are 30,000", said Mazăre. He said that what has happened in the port so far is not fair at all, because certain investors have been heavily favored by being awarded preferential rent rates, which were set through an Emergency Ordinance, as well as 50-year leases, while anybody who would want to invest now would only be allowed to sign ten-year leases, with the option for one ten-year extension.

Union leader: "The port is a national strategic objective"

The leader of the National Federation of Port Unions, Mircea Burlacu, said that the speech of Radu Mazăre was "pretty, but politicized" and that the port and the resort of Mamaia have nothing in common. "We are mixing the issues of Mamaia together with those of the port, when they are completely different, they have nothing in common. The port exploitation is a complex matter, which few people understand", said Burlacu. He said that the role of a port administration is to create facilities for private operators. "What a port administration can do for operators is create facilities for them and lower the rates they charge. The port of Constanţa is one of the most expensive ports (...) We will not give up, the community of the port wants the state to remain a majority shareholder with 50% plus one of the shares, and you can do what you want with the rest of them. The port is a national strategic objective", Burlacu said.

Radu Mazăre then said that transferring control of the port over to the local community was one of the promises made by the USL in its 2012 campaign and that he intends to honor it. "I never said that tourism activity is the same as that in the ports. When I took over Mamaia it was out of fashion, now it has become an example for Romania and Europe. Private investments in Mamaia are ten times higher than the ones made in the port of Constanţa", the mayor said.

The talks escalated the moment when Radu Mazăre showed protesters folders which contained 45,000 signatures from the citizens of Constanţa who agree with the transfer of a 13% stake in the port to the Local Council. "There have been 300 of you here today, while over here are 45,000 signatures and 15,000 more are on the way", Mazăre said, pointing at the folders in front of him. The leader of the National Federation of Port Unions accused Mazăre of having forced people to sign: "How were those signed? You forced people to sign them by offering them gifts. You didn't get people to sign them by knocking on each door". "I see you are reprimanding me. I have not interrupted you", Mazăre said, who proposed organizing a local referendum on this matter, after the union leader had proposed a national referendum.

The local press reported that the mayoralty has offered food to the citizens, while asking them to sign papers stating that they agreed to the transfer of the block of shares of the port of Constanţa from the Ministry of Transports to the Local Council.

Radu Mazăre said that he sees no problem with the fact that the municipality has begun a campaign to raise signatures to find out whether the citizens of Constanţa agree to the transfer of the shares to the Local Council, because they should benefit from the port as well.

The citizens of Constanţa are being asked whether they agree to having the mayoralty receiving additional shares in the port of Constanţa and whether they agree to having the resulting earnings directed towards increasing the household heating subsidies. The campaign is taking place in several places in the city, including in the neighborhoods where the poor citizens and the retirees with low pensions receive packages from the mayoralty, as well as through the homeowner and resident associations.

The mayor has also accused the unionists of defending the position of the businesspeople who are against this transaction. "I think that your objective is to protect those who are paying you", the mayor said.

"You are being paid by Idu (Corneliu Idu, one of the most important operators and freighters in the port author's note) and Comănescu (Gabriel Comănescu, the CEO of Grup Servicii Petroliere)", Mazăre told the unionists.

Mazăre also said that not all operators in the port oppose the transfer of the 13% stake to the municipality and that those that "don't have the highest levels of connections in Romania" have nothing against it.

After the meeting with Mazăre, the president of the National Federation of Port Unions said that since the meeting with the mayor yielded no results, the unionists will continue their protests, on Tuesday and Wednesday and they will resume them next week.

Burlacu also said that a large scale protest will be held before the Mayoralty of Constanţa, which may be attended by approximately 5,000 people, and that things could go as far as halting work in the port, if the Government doesn't go back on its decision to transfer the shares that the Ministry of Transport holds in the port of Constanţa to the mayoralty of the city.

The Ministry of Transports is currently a majority shareholder in the Administration of Maritime Ports of Constanţa, with a 60% stake. The Proprietatea Fund and the Municipal Council each hold 20%.

Dan Şova disregarded the opinions of the executives in the Ministry of Transports

The assignment of 13% of the shares of the Port of Constanţa to the local authorities of Constanţa is illegal, according to three notes, signed by three executives of the naval, management and legal divisions of the Ministry of Transports, which were ignored by minister Dan Şova.

The head of the Naval Division of the Ministry of Transports, Viorel Olea, says the following in the addressed note: "According to the provisions of the law, reducing the decision-making power of the state when it comes to managing public assets can only be done if the national interest requires it. We think that exercising the voting rights as a majority shareholder is the only real way for the state to influence the decisions of the company". The report also states that "if the change in the shareholder structure were to take place, the revenues to the state budget would decrease by 13%". According to him, no less than 10 steps would have to be followed for the project to be applicable, including the publication of the Draft Law passed by the Ministry of Transports on its website.

In the note he submitted, George Dionisie Mihai, the director of the General Department for Strategy, Management and Foreign Affairs of the Ministry of Transports, considers that "the legal methods for reducing the stake of the state in national companies are the sale of its shares, share capital increases with contributions from private investors, the donation or the sale of the assets of a social nature (i.e., not of the shares) as well as any combination of the aforementioned methods". As for the consequences that may arise, the management department of the Ministry of Transports notes: "The drastic dilution of the position of the Ministry of Transports in the shareholder structure of the Administration of Maritime Ports will create disruptions in the execution of the specific activities stipulated in the bylaws of the company".

Anişoara Cornilă, the CEO of the legal department of the Ministry of Transports, warns that the Administration of Maritime Ports of Constanţa is a company of strategic importance. She goes on to say: "The public institution involved may not consider the alienation of the holdings of the state in any other ways and using any other methods than the ones expressly stipulated in the law, as transferring the shares free of charge is not regulated in the legislation concerning privatization".

Over the weekend, Dan Şova said that he has asked the European Commission to issue an opinion on the intention of the Romanian authorities to transfer 13% of the Port of Constanţa to the local administration. He said that he would subsequently begin the procedures for obtaining the permits from the Ministry of Finance and the Ministry of Justice.

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