Romania’s new agreement with IMF – main targets

By bne IntelliNews August 6, 2013

Public offering of minority stakes in key state-controlled energy companies, cutting the payment arrears and streamlining the tax collection agency are the main targets of Romania's new stand-by arrangement (SBA) with the IMF, Ziarul Financiar daily comments, quoting leaked documents drafted during the preliminary talks on the follow-up deal in Bucharest. The Fund's Board is expected to endorse the follow-up agreement in the autumn.

The government will carry out the IPOs that were delayed under the past SBA with the Fund. The IPOs at nuclear plant operator Nuclearelectrica [10%] and the natural gas extraction and storage company Romgaz [10%] were postponed until the autumn of 2014 – by the end of September and October, respectively. The 10% IPO of hydropower company Hidroelectrica will take place by May 2014. The shares of both Hidroelectrica and Romgaz will be listed on the local stock exchange as well as on a foreign exchange under dual listing procedures.

The government also promises to sell the majority stake in cargo railway company CFR Marfa by the end of September. The privatisation is now in limbo after the government endorsed the privatisation contract but has not published it in the official journal yet. President Traian Basescu urged the government to publish the contract – or the bidder might ask for compensations. The would-be buyer is not likely to have the necessary funds, President Basescu added. As we reported, the government picked GFR as a winning bidder for 51% in CFR Marfa. GFR is supposed to pay EUR 202mn and invest RON 200mn [EUR 45mn].

Quarterly reports will be drafted on the situation of public payment arrears in state-controlled companies. The reports will be released by the 25th day after the end of each quarter. To reduce arrears, decisions such as placing certain companies under solvency might be taken.

The tax collection agency ANAF will be reorganised via transforming its 221 independent local bureaus into 8 regional directorates. The 1,500 employees of the fiscal law enforcement agency Garda Financiara will be incorporated into ANAF. Garda Financiara will be dismantled. One-stop-shops for contributors will be set up. In terms of taxation, the property taxes will be increased for the property used in commercial activities – like the apartments let to firms that use them as offices.

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