Republic of Montenegro: Public Expenditure and ... - Vlada Crne Gore

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86 Chapter 6: Beyond the National Budget: Fiscal Risks of Local Governments and State-owned Enterprises 6.17 All three SOEs are vulnerable and cause contingent risks to the government. MA, as the only SOE not registering operational losses, has a large currency mismatch in its operations. While all its revenues are denominated in euros, about 65 percent of MA spending (i.e., lease contracts until 2007 of two airlines and purchase of fuel) is in US dollars. The appreciation of the Euro against the US dollar during 2002-05 has benefited MA; however a reversal of this trend would have an adverse impact on MA income. Both EPCG and PCG have sizeable contingent liabilities relative to their operating balances. These companies provide essential public services, they are national monopolies in Montenegro, and their size in terms of employment is very large. EPCG sales are also cross-subsidized. In case of a sudden financial weakening in any of these companies, the government cannot but provide them with financial assistance. 78 78 In the case of PCG, the new law states the government should compensate for the losses arising from certain services.
Table 6.2. Montenegro: Characteristics of Major State-Owned Enterprises 1/ Public Enterprise Production Sector Pricing Policy Prices reflect costs Receives subsidies 2/ Managerial Independence Government Relations Financial Conditions Governance Structure Empoyment Policy Standard tax Autonomous: Only Engaged in and Creditworthiness Minority Receives loan Stock Outside Annual Overstaffed Objectives activities rules as Debt Level 4/ Protected Commercial quasi-fiscal regulatory Profitability 3/ Rights Of civil Wagesetting guarantees Debt listed 6/ Audits Reports service laws privates Cost 5/ Contingent Liabilities 7/ ElektroPrivreda CrnElectricity No No Yes Yes Yes No Yes Yes Yes 0.0% 17.9% 22.90% Yes Yes Yes NA Yes 9/ Montenegro AirlineAir traffic Yes No Yes Yes No Yes No No Yes 0.05% 25.7% 11.36% No Yes 8/ Yes NA No Posta Crne Gore Post No No Yes Yes Yes No No Yes Yes 0.0% 15.0% 2.20% No Yes 8/ Yes NA Yes 9/ 1/ "Yes" means enterprise meets specific test. 2/ If the answer is "Yes", indicate whether the subsidy is compensated with transfers from the budget. 3/ Profitability is defined as the ratio of net profits to net worth in most recent year, in percent. 4/ Debt level is defined as the ratio of total liabilities to total assets in most recent year, in percent. 5/ Debt cost is defined as the ratio fo accrued 4-year financial costs to average total debt, including short and long-term debt, in percent. 6/ Indicate whether in a major Exchange, in the domestic exchange, or neither. 7/ Indicate whether the enterprise faces important contignent liablities, and their nature. 8/ State-owned audit company. 9/ Both enterprises face significant contingent liabilities generated from the regulated pricing of their services.
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Report No. 36533 Republic of Monten
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CONTENTS ACKNOWLEDGMENTS ..........
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TABLES Table 1.1. Montenegro’s Gr
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ACKNOWLEDGMENTS This is the first v
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ii Executive Summary and procuremen
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iv Executive Summary 2006-2010 is p
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vi Executive Summary bill in the ke
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viii Executive Summary 23. Going fo
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x Executive Summary 27. The impleme
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2 Chapter 1: The Economic and Insti
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10 Chapter 1: The Economic and Inst
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12 Chapter 2: Composition of Public
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Page 112 and 113: 94 References Langseth, Peter Jerem
Page 114 and 115: 96 Annex 1 Indicator 2001 2002 2003
Page 116 and 117: 98 Annex 3 ANNEX 3. COSTS OF ALTERN
Page 118 and 119: 100 Annex 4 Local roads planning, f
Page 120 and 121: 102 Annex 4 with EU standards and d
Page 122 and 123: 104 Annex 4 Most of the railway’s
Page 124 and 125: 106 Annex 4 C. Public Expenditure o
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Republic of Montenegro: Public Expenditure and ... - Vlada Crne Gore

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