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State-owned enterprises will be given more powers

State-owned enterprises will be able to lease real estate and agricultural land of small size without the authorization of the Public Property Agency (PPA). The government proposes to amend Law 121/2007 on the management and privatization of state property.
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State-owned enterprises will be given more powers

Oleg Tofilat

The amendments also provide for clearer rules for accounting of state assets and unified criteria for their sale and use. Mechanisms of control and coordination in the administration of state property at the local and national levels will also be tightened.

As APS Director Roman Kozhukhar noted for Logos Press, the package of proposals prepared by the agency is aimed at creating conditions for more efficient operation of state-owned enterprises. The aim of the proposed measures is to remove at least part of the excessive regulation and bureaucratization. The head of the APS explains that even vacation or business trip permits must be requested by each state enterprise from the agency.

Some of the changes concern the removal of existing restrictions at the level of state property administration. Thus, it is proposed to cancel the current thresholds that hinder the leasing of administrative and production space. For example, a state-owned enterprise could lease premises of 20-30 square meters through an auction and without mandatory coordination with the agency.

Another change concerns the leasing of agricultural land. Today, the legislation limits the lease period to five years, which is not enough time to grow a vineyard or an orchard. Therefore, it is proposed to extend this period. All the more so because small areas of 5-10 hectares, of which there are many in Moldova, are not suitable for sowing cereals.

Roman Cojuhar mentioned the former heads of the Chisinau International Airport Constantin Vozian and Moldovan Railroad Oleg Tofilat, who cited bureaucracy and lack of authority as reasons for their resignation.

“Excessive bureaucratic procedures are a big problem,” Oleg Tofilat commented on the APS proposals. – It hinders the activities of state enterprises and binds APS, which has to deal with approvals. And it has been waiting for its solution for a long time, so these issues are ripe”.

He specifies that on vacations and business trips it is necessary not only the prior consent of the APS. In addition to it, the agency requests the documented position of the administrative board of the company. That is, for a manager to go on a business trip, it is necessary to obtain a favorable decision of the administrative council, and its meetings are convened in advance, at least five days before the appointed date. Provide its members with all documents for consideration, explain the reasons in detail and then document everything – draw up minutes, sign them and send them together with a letter to the APS. As they say, there is no need for comment.

“In my practice, after the war started in Ukraine, there were a lot of questions about logistics,” Tofilat continues. – It was necessary to go to Romania, to Ukraine. These kinds of meetings are very important, and you don’t have time to coordinate travel. It takes at least ten days to decide on an admin council. So in exceptional cases, like in the private sector, notification would be a solution. That’s what you have to proceed from. Even if it is a longer and more expensive trip. The turnover of the railroad is more than one billion lei per year, so anything less than 50 thousand euros, in principle, should not divert the attention of the admin council”.

Oleg Tofilat gives concrete examples. “I allowed myself to inform the APS about a business trip a day or two in advance, and they had to respond to my request. The thing is that the situation with business trips is not spelled out in the law, and it was not a violation. But it was a condition that was part of the APS contract with the director of the company. As for vacations, it probably makes sense for the director to at least notify the employer of the vacation. I always make comparisons to the private sector in such cases. So I am convinced that the agency should not approve the vacation. But the supervisor should notify the employer of an extended business trip or vacation.”

As for lease issues, the interlocutor believes that the practice of making such decisions through the founder should be abandoned. “Here, I would probably give more authority to the admin council, and through it to the head of the enterprise,” says the former administrator of the WDM. – This is again due to the lengthy and bureaucratized convocation procedure. In addition, the EU has the so-called “subsidiarity principle”. It implies that such decisions should be taken at the lowest level where the relevant competencies are available.

– There are hundreds of such facilities on the railroad, he continues. – And in my understanding, most of them should be handed over by the decision of the head of the enterprise, without delays and interference of the administrative council, but according to the procedure established by him. Everything that generates less than one million lei per year can be handed over through tenders, and above that – by procedure and voting. Let’s say a watchmaker rents a small room at the station in Donduseni. It is nonsense to renew his contract year after year through the administration council. Therefore, I believe it is the prerogative of the management to make such decisions and be responsible for them within the framework of the regulations.

State enterprises also have problems with the write-off of fixed assets, as well as with the sale of unnecessary ones. The reasons lie in the same bureaucracy. “We at the enterprise planned to improve its financial condition by selling unnecessary property while state funds for infrastructure support were coming in,” he continues. – The railroad has buildings that the market needs. But they could not get permission to sell them, even though they are empty and do not generate income and taxes. And it is impossible to rent them out because they need serious repairs.


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