A critical Analysis of the strategic sector Privatization in Macedonia

• Author: Endri Papajorgji
• Position: Dean of the Faculty of Law at Tirana Business University College, Tirana, Albania
• Pages: 6-10

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

6

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

Abstract

The Macedonian government did not dra a specifi c strategy for the privatization of the

strategic sectors. The Privatization law did not apply to companies that managed waters,

forests, gambling, banks, fi nancial and insurance organizations and monopoly companies

(Art. 3 of the Privatization law). The privatization process of the strategic sectors was fi 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 fi rms with good technical

and fi 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.

Introduction

The privatization process began with the privatization of Fa OKTA, the only oil

company in Macedonia. As a result of the Greek embargo, the fi 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 fi 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.