Accounts Chamber: The State Lost Millions as a Result of Privatizations

The Accounts Chamber revealed a number of violations in the privatization process of state property in 2013-2019. Experts say that the state is losing a lot of money because public assets are sold at much lower prices than their real value. Representatives of the Public Property Agency and the Ministry of Economy say that these frauds are difficult to deal with due to the confusing provisions of the legislation. According to experts, a state strategy for the privatization of state assets is needed to solve this problem, according to tvrmoldova.md. During 2013-2019, the state received 1.3 billion lei from the sale of state property. However, officials of the Accounts Chamber argue that the income should have been much higher. These estimates are based on audits carried out in the case of privatization of several public companies, including AIR Moldova, the Gara de Nord joint stock company and VestMoldTransGaz. “The audit shows that the privatization of 25 state-owned facilities was not carried out in a competitive environment, and 17 facilities were privatized with only one competitor who was selected and won,” Angela Frunze, head of the Main Audit Department, said. In the case of the privatization of the Gara de Nord alone, the state lost more than 7 million lei. The appraiser estimated the market value of the stake at 7.1 million less than the par value based on the company's equity. The Court of Auditors ruled that some of the privatized buildings also include adjacent state land, for which businesses do not pay. In the case of alienation of three land plots alone, the state lost 34 million lei. “The audit shows that in most cases, especially in Chisinau, the buyers are not targeting the privatized building, but the adjacent land acquired at a price below market. For example, the privatization of the Training and Production Center located at P. Halippa Street 2, where the price was much lower than the real cost per one hundred square meters. Now the building on this site is being demolished and a residential building will be built," the specialist said. Representatives of the State Property Agency and the Ministry of Finance shrug their shoulders and say that there are no specialists in Moldova to assess privatized public goods. The Accounts Chamber sent 21 recommendations on the efficient management of state assets to the State Property Agency, the Ministry of Economy and the Ministry of Finance, institutions responsible for the privatization process.