A critical Analysis of the strategic sector Privatization in Macedonia

AuthorEndri Papajorgji
PositionDean of the Faculty of Law at Tirana Business University College, Tirana, Albania
Vol. 3 No. 2
June, 2019
European Journal of Economics, Law and Social Sciences
IIPCCL Publishing, Graz-Austria
ISSN 2519-1284
Acces online at www.iipccl.org
A critical Analysis of the strategic sector Privatization in Macedonia
Assoc. Prof. Dr. (PhD Uni Graz) Endri Papajorgji
Dean of the Faculty of Law at Tirana Business University College, Tirana, Albania
The Macedonian government did not dra a speci c strategy for the privatization of the
strategic sectors. The Privatization law did not apply to companies that managed waters,
forests, gambling, banks, nancial and insurance organizations and monopoly companies
(Art. 3 of the Privatization law). The privatization process of the strategic sectors was rst
implemented by special laws and amendments to the privatization law in 2000, which
introduced the tender sale procedure as the standart one. The Privatization Agency was not
responsible for the privatization of strategic companies. Instead, they were proposed by the
relevant ministries for privatization, while a Commission under the Ministry of Economic
A airs was responsible for implementing the procedure. As in Albania, this process has been
supported by the IMF and WB as well as by international consulting rms with good technical
and nancial knowledge in the privatization and restructuring process in the search for
strategic investor (Ra ner, Forman, 2000, 24). In this sense main objective of this manuscript is
the analysis of the strategic sector Privatization in Macedonia.
Keywords: Macedonia, Analysis, commercial law, strategic sector privatization.
The privatization process began with the privatization of Fa OKTA, the only oil
company in Macedonia. As a result of the Greek embargo, the nancial situation of
this public oil company in 1999 was very di cult (Barlet, 2008, 69). The Macedonian
government entered into negotiations with the Greek companies Hellenic Petroleum
and Meton Etep (the Greek state owns the majority of shares) in 1998 and took further
steps to privatize the company the following year. In 1999, the rst amendment of the
privatization law entered in force. It foresaw direct sales to strategic investors. As a
result, in May 1999, the privatization contract for the sale of Fa OKTA to the group
EL. P. ET. Balkaniki for a price of 32 million US $ (payable in three installments) was
completed. 1
In 1993, before being privatized, OKTA signed a 10 year contract with the Greek oil
company Mamidakis Jetoil AG for the distribution of the oil imports of OKTA and
processing at the facilities of Jetoil in Thessaloniki, Greece. Until 1999, this contract
was respected; a er the privatization in favor of Hellenic Petroleum not anymore,
because the oil was processed in the facilities of Hellenic Petroleum in Thessaloniki, the
direct competitor of Maimadiks Jetoil AG (Velkova, 2007, 2). Because of alleged breach
of contract Mamidakis Jetoil AG sued the Macedonian Fa OKTA AG 2004 before the
arbitration court in London. The London Court of Arbitration recognized a payment
1 ICG, Balkans Report – Macedonia’s public secret – How corruption drags the country down No
133, 2002, 15 (16), h p://www.crisisgroup.org/~/media/Files/europe/Macedonia%2015.pdf.

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