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Privatisation vouchers Part 2

It is difficult to build a complete picture of the actual status of privatisation vouchers as evaluated against the remaining privatisation potential, considering the lack of necessary indicators from official sources. The sporadic indicators made available to us from other public sources show a disappointing and worrying picture. For instance, the figures solely concerning privatisation vouchers indicate that the government has issued a total of L74 million ($769,000) of privatisation vouchers. Out of that number, only 68.3% have been distributed to Albanian citizens. A small quantity, 17.6% of the total issued, have been used in the privatisation process. The remaining 85.4% remain in the hands of their holders or as a promise for distribution (the issued but not-distributed portion that amounts to 31.7%). On the other hand, the number of companies in which the state continues to own a full or partial stake is relatively small. For instance, we can name ARMO (15% state ownership), Albpetrol (100% state ownership), OSSH (24% state ownership), AMC (12.5% state ownership), Albtelekom, (24% state ownership), INSIG (61% state ownership) and a few other companies operating in the water and energy industries and the non-strategic sector.

These indicators, as well as the drafting of the existing legal framework, create a feeling of scepticism about the credibility of the government concerning the fulfilment of its promise to give value to privatisation vouchers. As an inevitable downside of this scepticism, the market has reacted with a negative evaluation of the vouchers. Consequently, the privatisation vouchers' market value has fluctuated in different periods depending on the signals coming from the government, devaluing the vouchers to a market value of 2% of their face value. This, of course, causes real and considerable damage to the holder of the title. On the other hand, even the government itself is at risk of facing state liability, regardless of this being considered a state debt default, extra-contractual liability or both.

This situation has given rise to a lobbying initiative in Albania from holders of privatisation vouchers, businesses and practitioners. At the origin of this initiative lies the proposal for a legal reform that would provide in a clear, specific and structured way the use of privatisation vouchers in the remaining stage of privatisation. Though such reform does not require substantial legal change, it certainly requires a strong political will.

Needless to say, in spite of how efficiently the government will address this problem, it is still going to be a delayed reaction that will not turn this long story into a successful one. The previous holders of privatisation vouchers have already lost because of the governmental role in this process. What remains to be done is to seek and save what can be saved and not end up with a failure.

Defining features

It is hard to find an accurate definition of privatisation vouchers, given their unique scope and destination. Of greatest concern is the fact that nowhere in the Albanian legal framework is the liability of the state in the event of failing to efficiently enable the use of these titles clearly identified. To indicate some of thier key features, privatisation vouchers:

  • can be used in the privatisation of the subjects or assets of the subjects that operate in the strategic or non-strategic sectors and that are entirely or partially state owned;
  • continue to be valid until the deadline of December 2010;
  • are titles convertible into equity;
  • are tradable among physical and juridical persons, regardless of nationality;
  • are issued in physical form;
  • are issued in bearer form; and
  • have a face value.

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