Learns Why Government Not Paying Debt for Telecom

Kosovo's telecom currently lies in deep financial crisis and risks defaulting after the accumulated debt has reached 60m euros.

Economic Development Minister Valdrin Luka, for Radio Free Europe, has said that despite the fact that the shareholder of this company is the Government of Kosovo, debts will not be repaid. He says Telekom has the potential to be profitable in the market, but is not managed properly.

“Already have to look at forms as governments, gather and discuss how to recover Telekom, how to return to profitable companies, cut operational costs, because these costs are huge. Normally to look at the trends, because a company that lowers sales and increases expenses at the same time is not normal in any world business”, Luqa said.

For the financial crisis of this company, Telekom Board Chairman Besa Shatri Berisha has announced on Monday that the government cabinet's accumulated debt has reached 60m euros.

If not quickly intervened, she has said, bankruptcy is at risk for 12 months.

According to her, the company has a large number of workers, large rent expenditures, closing a Z-mobile debt of over 26m euros, about 11m euros in debts to suppliers, and continuing losses, where the company has lost fourm euros in just three months.

Naim Gashi, an economic expert, says the Kosovo government must first identify the causes of the financial crisis and take steps towards those who have brought the company into this situation.

According to him, the company's inadequate management and precisely contract links to the operator Z- Mobile has brought Telekom money to bankruptcy.

I think the first point should be investigated why it came to this state. This situation has come just because of Z- Mobile's damaging financial contract. There may also be scenarios that they would like to bankrupt Kosovo Telecom and privatise for a symbolic price. It would not be surprising that the very ones who have destroyed Kosovo Telekom also be the buyers or privatists of Kosovo Telekom”, Gashi says. / REL

Economic Development Minister Valdrin Luka, meanwhile, has said the Kosovo Government's goal is the privatisation of Kosovo Telecom. According to him, such a process could begin after two years.

“We are awaiting the arbitrage decision because it is one of the main obstacles at the moment. Then there must be a restructuring within Telekom in order to create room for privatisation as well. A company that has losses of about 20m euros annually, while already in 2018 there is even more, then it is not easy to privatise, because foreign investors are afraid to enter that privatisation”, Luka has said.

Kosovo's telecom has twice been subjected to the privatisation process, but twice in a row the Government of Kosovo has failed to complete the process successfully.

In the event of the privatisation of 75 percent of Kosovo Post and Telecom shares, in 2013 the company “Axos { Capital” was declared winner, worth 277m euros, but the contract, according to the winning company, was never implemented.

The company indicted the Government of Kosovo and the court processes are under way in an arbitrage court.