Slovak anti-monopoly office under fire over airport sale

Bratislava airport, photo:

In Slovakia the government's Anti-monopoly Office is under fire over the sale of the country's major airports. Its critics says it has succumbed to political interference after postponing the sale of a majority stake in Bratislava Airport to an Austrian led consortium known as TwoOne- which included Vienna International airport. The Slovak Prime Minister Robert Fico has since made it known the deal is off. Anca Dragu reports from Bratislava.

Wednesday at noon the spokesperson of the Anti Monopoly office, Alexandra Bernathova was explaining me why her institution decided to postpone the decision.

"In its administrative adjudication the Anti-monopoly office identified concerns that the sale will lead to the harming of effective competition in the relevant market, and has informed the privatisation participants of this.. In addition, we asked the parties to express their standpoints on the assessment results, along with any proposed amendments or additions by August 9. Vienna International Airport did not submit such document. Taking into account the right of the parties concerned to express their standpoint before the decision is made, the office has extended the deadline for issuing the decision to October 19, and has informed all those concerned".

Many people in Slovakia worry that actually Vienna airport is trying to eliminate the competition from Bratislava given the fact that the two airports are less than 60km away from each other and the airport in Bratislava has been a magnet for low cost airlines recently. Vienna international airport repeatedly denied such reports. But it didn't manage to persuade Robert Fico, the Slovak Prime Minister, who weeks before the Anti-monopoly office was to issue any statement, was publicly rambling about his firm decision to stop the privatization of Bratislava airport because it is a strategic company in the Slovak economy.

"My government manifesto states very clearly that no further privatization of strategic companies will go on in this country", said Fico at the end of July.

The privatization contract between the Slovak government and the winner of the tender, stipulates that TwoOne had to submit the decision of the Anti-monopoly office by August the 15th. Otherwise the contract might be cancelled and the negotiations could start with the bidder that ended in the second place. The state could also, at least theoretically withdraw from the deal. In case of cancellation of the privatization the Slovak government has to pay 47.3 million euro back to TwoOne, plus other costs related to an eventual court case. The sale of the 66 percent stake in the airports in Bratislava and Kosice would bring 300 million euro to the state budget. But Robert Fico doesn't seem too impressed by these figures and on Wednesday afternoon he announced his government decision to back out of the deal to sell Bratislava airport.

"They didn't submit the clearance from Anti-monopoly office by August 15th as it was required by the contract, therefore I instructed the head of the State Property Fund which by law concludes contract on sale of enterprise to back off the sale of Bratislava Airport by September 15th. Don't be surprised by this decision because I have been expressing my opposition to this deal for a long,long time, even before I became prime minister."

This decision sparked controversy. Jozef Oravkin a partner with the financial group Penta, on behalf of the TwoOne consortium accused the Slovak government of putting political pressure on the Anti-monopoly office.

"We have clear information that people from the Ministry of Transport held meetings with the management of the Anti-monopoly office where they discussed the political sensitivity of the sale of Bratislava airport. One possibility how to stop it was to delay the clearance from the Anti-monopoly office. They said they needed half a year to analyze all the relevant documents and then took only a few afternoon hours to take a decision," said Oravkin adding that TwoOne will complain to the arbitrage court in Paris as soon as they get an official document saying that the Slovak government withdraws from the privatization deal.

TwoOne says its documents clearly demonstrated that Vienna International Airport did not intend to harm the commercial interests of Bratislava airport. The consortium would like to keep on buying the airport in Kosice, a transaction which hasn't been affected by this week's decision.

The conflict could severely damage the Slovak economy, not only because the state budget might loose quite good money but also because if TwoOne manages to prove that Anti-monopoly office answered a political command than this institution will completely loose its credibility. It could be a very bad sign for the transparency of the business environment in Slovakia