CyTA and EAC are no more profitable than Cyprus Airways

IT TURNS my stomach every time I hear this sickening myth about the so-called ‘profitable semi-governmental organisations’ being supposedly part of the national wealth and therefore must not be privatised. It is the same fairy-tale we have been hearing for the last 40 years about Cyprus Airways, the horrific results of which we are seeing today.
The issue has been in the news lately because of fears that the public debt, after the bailout, will not be considered sustainable, thus activating the provision in the memorandum for the sale of state assets. And of course, the first organisations to be sold would be CyTA, EAC and the Cyprus Ports Authority. It would be a very good thing.
CyTA and the EAC are no less of a liability for Cyprus society than Cyprus Airways. On the contrary, their cost to the public is much higher than the cost of our so-called national carrier. The only difference is that in one case the cost is paid by the state from the taxpayer’s money while in the other the public pays directly as the high cost is included in the bills.
CyTA, the EAC and the CyBC are organisations with outrageously high operation costs – higher than those of the public service. It is no accident that Cypriots pay the highest electricity rates in Europe. The pay and benefits of EAC staff are staggeringly high. These organisations operate as small fiefdoms within Cypriot society.
The average cost per employee at these organisations is in the region of €60,000. To put this in context, the average cost per worker at a sound and solid business is between €20,000 and €25,000. From these figures alone, taking into account the fact that labour costs are in excess of €130 million for each organisation, it is easy to understand how much cheaper electricity and telephony would be for us if these organisations were private companies.
Under the circumstances the slogan about ‘profitable semi-governmental organisations’ is nothing more than a bad joke. CyTA and EAC are not normal businesses to be able to boast that they are profitable. They are monopolies that have the ability to decide their profits in advance.
If the EAC decided to make a profit of €100 million in 2013, it would realise it without any difficulty. It knows its costs, it knows the volume of its sales and can fix prices so that it can make the profit it wants. This is the type of business our political jokers describe as a ‘profitable’ organisation.
The privatisation of CyTA, EAC and other such organisations is not just necessary for reducing the public debt, it is a pressing national imperative that would, above all, serve the interests of all citizens. If it does not happen now, these organisations will suffer the same fate as Cyprus Airways.
Our society can no longer sustain them. Competition has ensured that CyTA’s surpluses are declining every year, while the EAC, with its ridiculously high labour costs, will be unable to cope with competition which will soon arrive. Inevitably, they will also be led to bankruptcy. When this happens, just as it has with Cyprus Airways, nobody will be willing to buy them.
Of course it would be naive to believe that either the current government or the next one will dare put them up for sale. President Christofias and the presidential candidates have started declaring that they will do no such thing.
Fortunately, those privatisations will be imposed by the troika. In the end, the troika will do us a lot of good.   

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.