PRESS STATEMENT   



 

The statement of Prime Minister Adrian Nastase at the signing ceremony of the privatisation of the SIDEX Galati steel mill - Victoria Palace, 25th of July 2001

It gives both myself and my colleagues in the Cabinet great pleasure to take part today in a ceremony with a very special meaning. Many have said that our Government does not want privatisation; many have said that we do not want to renew the economic structures and to move forward with the economic reform. Still, at this moment, 200 days from our coming in office we are able to stand before you with facts. We are talking about the privatisation of the Agricultural Bank (Banca Agricola), we are talking, among other things about the privatisation of the SIDEX, probably the most important privatisation of this period, not only for Romania, but more widely.

I will not talk about the Governing Programme, about our objectives, I will not talk about the way we intend to continue the economic action. Nevertheless, I wish to confirm the fact that our policy has been very clear: we intend to consolidate the situation of the private property in Romania, and, at the same time we want to move forward privatisation, as the fundamental element for a more proper and more efficient management of Romanian enterprises.

I do not intend to remind what SIDEX means to Romania. Still I would like to state that 150,000 citizens of our country depend on SIDEX. 60% of the population of the Galati city and of its surroundings depend on the success of the endeavour undertaken by us today. On the other hand, it is very clear that so far SIDEX has been generating 80% of the total losses caused by Romanian state-owned enterprises. Due to the impossibility to provide the necessary capital inflow for investments, it is obvious that technologies could no longer be upgraded; thus a certain erosion took place, accompanied by a decrease in quality. This is why we needed a partner, a strategic investor and I am very glad that I can now welcome the closing of the privatisation contract, offering the foundation for further partnership.

The LNM Group is the fourth largest steel producer in the world. I will not go into details of the contract, but I believe that it is very important to emphasize that this does not represent merely the selling of a share portfolio, a simple privatisation; the contract we are signing today is, first and foremost, a partnership contract, with a reliable investor, from whom we expect further responsible participation in the productive economic actions of Romania.

The total commitment of LNM Group amounts to 500 million US dollars, in a combined form, that is investment commitments, which are very important, including investments in environmental protection, and also working capital, as well as the price itself per share. What is important, from our point of view, is mainly that SIDEX will cease generating losses for the state budget and for the social security budget. Secondly, it is equally important that now there will be enough money for investments and for the maintenance of production facilities. It is also important because we will be able to maintain jobs and thus we will enjoy the necessary support for the horizontal industry, which depends extensively on the steel production in Galati.

The LNM Group will also have the opportunity to expand by itself in various other areas, either through privatisation, or through green-field investments, so that it will become a very important partner, not only for the steel industry itself, but also in adjacent economical areas. Some have considered our partner somewhat ineffable, dwelling somewhere in the isles and with a postal office box as headquarters. Therefore I welcome today Mr. Mittal and His Excellency, the Ambassador of the Great Britain, confirming that the LNM Group is an extremely reliable partner, setting forth a sound economic endeavour.

I would also like to thank the negotiations team, led by Minister Musetescu and for their extraordinary effort, working day and night in order to conclude this very complex contract. I believe that we now have the opportunity to issue a very clear message concerning our political will and our responsible economic actions, both domestically and abroad.

I also wish to thank the labour unions which have been at our side during this very important privatisation process and I believe it is paramount to reassure them that one of our most urgent concerns will be to maintain as many jobs as possible. In this connection, I would like to state that the unemployment rate in Romania amounts to 8,8%, as compared with 12% in December 2000. We have to fight for jobs, but at the same time we must keep in mind that it is crucial to modernise and to renew the Romanian industry. We have the opportunity today to show, very clearly, how we think, and, even more importantly, how we act.

In the end, I would like to thank once more all those who have rendered this moment possible, the signing of this contract with a symbolic value after exactly 200 days in office. I would like to thank our partners and especially President Mittal for his commitment and for his understanding of the extremely delicate issues which have required ample negotiations in preparing this contract.

Thank you again.

 

Cabinet of The Prime Minister - DAIS
July 25, 2001