Summary of major economic happenings of the week
Monday, June 19
Five-Month Tax and Customs Revenues at SKK 96.881 Bln.
Tax and customs offices in the Slovak Republic collected SKK 96.881 billion in the first five months of 2006. Of this tax revenues made up SKK 94.44 billion and non-tax revenues the remaining SKK 2.441 billion. Five-month collection thus represented 43.57 percent of the annual budget for tax and customs offices. Local tax collection on goods and services of SKK 71.184 billion dominated tax revenues in five months of this year, constituting 41.41 percent of the annual target set by the Finance Ministry. Value added tax (VAT) collection amounted to SKK 50.8 billion and excise tax collection reached SKK 20.387 billion, the Central Tax Directorate's spokesman Robert Merva informed SITA on Monday.
ZSSK Cargo Offers for Sale its Receivables of SKK 130 Mln.
Cargo railway transport operator Zeleznicna Spolocnost Cargo Slovakia, a.s. (ZSSK Cargo) Bratislava is offering for sale its claims at a total nominal value of SKK 130 million. According to information published by the company, corporate entities as well as private individuals can submit bids to buy the package. Potential buyers have until July 3 to declare interest in buying the claims. ZSSK Cargo originated on January 1, 2005 by the split of Zeleznicna Spolocnost, a.s. into two separate companies. ZSSK Cargo took over its activities in railway freight transport. ZSSK Cargo posted a loss of SKK 178.5 million in Q1-Q3 2005, while it planned to make a loss of SKK 117 million for this period. It transported 35.1 million tons of cargo nine months into 2005 and sales from goods transported amounted to SKK 10.4 billion.
U. S. Steel Kosice Announces SKK 17 Bln. Dividends
U. S. Steel Kosice, s.r.o. (USSK) has declared an SKK 17 billion dividend, the majority of which will be used to settle inter-company obligations owed to USSK. Spokesman Jan Baca told SITA that the balance is expected to be paid over time and is expected to be used to support further investments in Europe. These actions should not be significant to USSK's ongoing operations and investment policies.The company has fulfilled its capital expenditure commitment to the Slovak government made at the time of acquisition in 2000. As of May 2006 the company has invested USD 700 million, which is well in advance of the 2010 deadline. Future investments will be in excess of our initial agreement, the company announced.
Economy Ministry Prepares Unbundling of SSE Power Distributor
The Economy Ministry is preparing the unbundling of trade and distribution activity in the regional power distributor in central Slovakia, Stredoslovenska Energetika, a.s. (SSE). Unbundling should be completed by January 1, 2007. A 100-percent subsidiary Stredoslovenska Energetika-Distribucia, a.s. (SSE-D) originated thanks to unbundling this April, in which SSE should deposit part of the company including assets inevitable to operate a distribution network as of January 1, 2007. This information stems from the proposal for SSE unbundling, elaborated by the Economy Ministry.
Tuesday, June 20
Construction Sector Employment Up 10.4 Pct. to 153,100 in April
Construction firms in Slovakia employed 153,100 people in April of this year, which is an increase of 10.4 percent y/y. Thereof the number of blue-collar workers increased by 12.9 percent y/y to 129,400, Construction Ministry spokesman Jan Palffy told SITA. Labor productivity measured by output per employee reached SKK 67,454 in April, going up 0.7 percent y/y. The average nominal monthly wage in the construction sector was SKK 14,007 last year, up 5.2 percent y/y. The real wage rose mere 0.7 percent y/y.
Hewlett-Packard Slovakia Wins Contract for Treasury System Support
The Finance Ministry signed a contract with Hewlett-Packard Slovakia, s.r.o. to provide application support services for the State Treasury information system by the end of 2009, amounting to SKK 360 million without value-added tax (VAT). The contractual price has not, according to the Finance Ministry, been set explicitly, since payment terms in the contract also include an hourly charge for concrete operations, whose number cannot be specified at the moment, reads information published in the Public Procurement Bulletin.
Prices of New Apartments in Slovakia have Stabilized
According to the National Association of Slovak Real Estate Agencies (NARKS), prices of new apartments have currently stabilized. "We register just moderate year-on-year growth in apartment prices of about ten percent," NARKS president Lubomir Kardos told journalists. He said the real estate market still posts a significant boom, chiefly in the Bratislava County. Older apartments show an opposite trend with their prices going up.
Out-of-Court Settlement of SPP-Kerametal Dispute Put On Hold
Gas utility Slovensky Plynarensky Priemysel (SPP) and Kerametal have not yet agreed an out-of-court settlement for their dispute. Government privatization agency the National Property Fund (FNM) spokesperson Tatjana Lesajova told SITA that the fund, as a majority shareholder in SPP, wants to initiate one more meeting of the parties concerned. "The FNM executive committee decided to authorize the Economy Ministry as executor of shareholder rights in SPP to postpone Wednesday's SPP extraordinary general meeting until June 30," said Ms. Lesajova.
Bratislava County to Receive EUR 31 Mln. in EU Funds by 2013
The total EU fund allocation for 2007 to 2013 for the Operational Program Bratislava County (OPBK) should represent EUR 31 million. According to the OPBK proposal, submitted by the Construction and Regional Development Ministry for interdepartmental review, the total sum comes from EU structural funds. Total allocation should amount to EUR 62 million including national co-financing.
RWE Still Interested in Takeover of Regional Power Distributor VSE
German concern RWE, holding 49 percent in Slovak regional energy distributor Vychodoslovenska Energetika, a.s, Kosice (VSE), wants to negotiate with the new government on the acquisition of the remaining shares in the regional power distributor. Current and future general directors Carl-Ernst Giesting and Norbert Schurmann, taking up the post on July 1, thus both VSE representatives for RWE, expressed interest in negotiations at a press conference in Kosice on Tuesday. RWE is interested in increasing its stake in VSE from 49 percent to 100 percent, but it would also agree to a model within which it would control 90 percent in VSE and the remaining 10 percent would be publicly tradable.
WEDNESDAY, June 21
Tourist Accommodation Facilities Report Q1 Sales at SKK 1.592 Bln.
Tourist accommodation facilities operating in Slovakia reported sales of SKK 1.592 billion in the first quarter of this year. Compared with the same period of 2005 this is an increase of 15.2 percent in current prices. Of this, foreign tourists paid SKK 1.027 billion, which is 14.6 percent more than in the same period of 2005. Their share in total sales dropped by 0.3 percentage points to 64.5 percent, reported the Slovak Statistics Office on Wednesday.
Slovakia to Borrow EUR 50 Mln. from the EIB for D1 Highway Project
The Slovak cabinet approved at its Wednesday meeting the draft agreement between Slovakia and the European Investment Bank (EIB) on a loan to construct the D1 highway stretch between Sverepec and Vrtizer, part of the Bratislava-Zilina highway. Subject to the agreement is the provision of an EUR 50 million loan, which should be the first EIB loan to construct this highway section. According to the agreement, the total project cost is estimated at EUR 245.3 million (approx. SKK 9.3 billion). The government wants to cover EUR 65.3 million from the national budget and European Regional Development Fund and Cohesion Fund grants. The remaining EUR 180 million should be refinanced through EIB loans.
Zlate Moravce to Get SKK 1.2 Mln. Subsidy to Build Industrial Park
The Slovak cabinet agreed at its Wednesday meeting to provide a subsidy of SKK 1.2 million for founding an industrial park in Zlate Moravce, western Slovakia. The town of Zlate Moravce will use the money for buy land plots under the future industrial park, as well as settlement of costs related to transfer of land plots, administered by the Slovak Land Fund, to the ownership of the town. According to an expert estimate, the value of the land plots is SKK 204 per a square meter. Total costs of building the industrial part are projected at SKK 300 million. The above subsidy will be allocated from the Economy Ministry's chapter within the subprogram "Support of Industrial Parks' Development."
Thursday, June 22
Petrol Prices Up by Almost SKK 2 in May
The average petrol prices rose by almost SKK 2 per liter over May. The Slovak Statistics Office reported that car drives bought one liter of the 91-octane and 95-octane petrol for SKK 41.33 on average. The average price of one liter of the 98-octane petrol was SKK 43.94 in May when the average retail price of one liter of diesel jumped SKK 1.09 to SKK 41.11. On the other hand, the average retail price of LPG fell by SKK 0.19 to SKK 22.33.
Oil Refiner Slovnaft Cut Work Force by 8.3 Pct. Last Year
Crude oil refiner and petrochemical giant Slovnaft Bratislava reduced its work force by 8.3 percent last year. Restructuring in the company continued last year and influenced not only the number and structure of employees but also the development of the average wage, stated the company in its annual report. At the end of last year Slovnaft had 3,014 employees. Staff turnover rate was 10.9 percent on 81 hired and 352 laid off employees. The company paid SKK 92 million in severance payments to employees who lost Slovnaft job due to organizational changes. The average monthly wage of Slovnaft employees without one-off items reached SKK 46,324. The average wage last year was thus close to three times the average wage in Slovakia.
New Industrial Orders Rose 10.3 Percent y/y in Slovakia in April
New industrial orders rose 10.3 percent in Slovakia in April 2006 compared with the same period of the previous year. In March they reported an increase as high as 26.7 percent y/y. Eurostat, the Statistical Office of the European Communities informed that compared with March, new industrial orders decreased by 1.2 percent in Slovakia in April.
Transpetrol Still Considering Route for Pipeline to Schwechat
Crude oil pipeline operator Transpetrol, a.s. is still considering a viable route for the construction of a crude oil pipeline from Bratislava to the Austrian refinery in Schwechat, chairman of the company's board of directors Stefan Czucz told SITA. "One of the alternatives under consideration leads through Zahorie region in western Slovakia and would cross into Austria across the Morava River and in Austria the pipeline would have to cross the Danube River," said Mr. Czucz. He added that the crude oil pipeline's construction is still at the stage of choosing the best alternative.
Cypriot Firm Acquires Over 41 Pct. in SLK Trencianske Teplice Spa
Cypriot firm Vicinity Investment Limited entered Slovak spa company Slovenske Liecebne Kupele, a.s. (SLK) Trencianske Teplice. According to information published by the Cypriot firm it acquired a 41.83-percent share in voting rights related to the spa shares on June 15. Vicinity Investment Limited is now obliged to announce a bid to buy all shares of SLK Trencianske Teplice. J&T group spokesman Maros Sykora told SITA this April that the group planned to enter the spa and manage it for J&T Banka clients.
Technical Aid Operating Program with SKK 3.852 Bln. from Eurofunds
The Construction Ministry counts on EUR 100 million from European funds within the Technical Aid operating program, which is approximately SKK 3.852 billion. Resources from the European Regional Development Fund should be allocated in the programming period between 2007 and 2013. The global aim of the operating program is to safeguard effective, efficient and correct management and implementation of European Union structural funds and the Cohesion Fund in the coming programming period, reads the operating program draft forwarded by the ministry for interdepartmental review.
Friday, June 23
NPP V2 Generated 2,499 GWh of Electricity in Five Months of 2006
Nuclear power plant V2 in Jaslovske Bohunice operated by dominant power producer Slovenske Elektrarne (SE) generated 2,499 GWh of electric energy in five months of this year, down 8 percent y/y. In May alone V2 produced 347 GWh of electricity. At the same time the nuclear power plant supplied than 1,060 terra joules (TJ) of heat by the end of May, the company informed.
Slovintegra Starts Construction of Steam-Gas Cycle
The company Slovintegra has launched construction of the gas-steam cycle in the Gena industrial park in Levice. The firm plans to invest SKK 2 billion in the project. Head of the Slovintegra board of directors Slavomir Hatina said the launch of operation is planned for the beginning of Q2 2007. The steam-gas cycle should supply heat and electricity to other companies in the industrial park and the town itself. The annual electricity output of the steam-gas cycle will be 80 MW and the total heating performance will represent 32 MW.
German Truck Concern MAN Opens Plant in Banovce nad Bebravou
German truck producer MAN launched full operation of its truck component plant through its subsidiary LKW Komponenten, s.r.o. in Banovce nad Bebravou in central Slovakia on Friday. "The company invested SKK 353 million in the plant and the opening ceremony completed trial production in the reconstructed plant that began this spring," Banovce nad Bebravou mayor Jan Turcan told SITA. He added that LKW Komponenten currently employs forty people and that this should double the staff number by the end of this year. In 2008 the plant should employ three hundred people.
Analysts Expect NBS to Wait with Further Key Interest Rate Increase
The National Bank of Slovakia (NBS) shouldn't increase key interest rates at the NBS Bank Board meeting next week, think market analysts. CSOB analyst Silvia Cechovicova sees no reason so far for further tightening monetary policy after a key interest rate rise by 50 basis points last month. The central bank will probably wait until the new ruling coalition is formed and its impact on the exchange rate of the Slovak crown is known, added the dealer.
Slovak Telekom Appeals against Telecommunications Office Decision
Slovak Telekom has appealed against the decision by telecommunications market regulator the Telecommunications Office (TU) stating that Slovak Telekom is a company with a significant influence on the local and long-distance call retail market for household and corporate customers through its fixed line network. The operator's position on the relevant retail market is such that it enables it to set call prices independent of competition, said TU. Slovak Telekom appealed against this decision within fifteen days of the decision being issued on June 7. The company maintains that the consultation process has not been completed in line with the electronic communications law and thus TU started the proceeding itself at odds with the law, meaning the decision itself is also in contravention to the law due to processing errors.
SPP Not Considering Raising Natural Gas Prices for Now
Gas utility Slovensky Plynarensky Priemysel (SPP) is not considering raising natural gas prices for households at the moment. President of the SPP board of directors Philipe Boucly said after the annual meeting of the international association Eurogas that they are monitoring and considering the situation. He said it is too premature for now to make statements on this topic as the price of crude oil remains high on global markets, which affects the price of natural gas. It is currently conditioned on dynamic economic growth and thus high consumption in countries such as India and China and also the unclear situation in Iraq and Iran, added Mr. Boucly.
RUZ Employer Association Wants to Preserve Tripartite in Current Form
The National Association of Employers (RUZ) expects the new government to preserve the current tripartite system. "We find the current social partnership system functional and see no reason for its revision," RUZ secretary Martin Hostak commented on information on the tripartite's alleged non-functionality. He stated that the current Council of Economic and Social Partnership (RHSP) originated based on a voluntary agreement of social partners in November 2004.