CYTA faces financial ruin unless it undergoes a radical operations transformation, the main opposition party has warned.
DISY sounded the alarm bells during debate in Parliament this week on CyTA’s budget.
Discussion quickly turned political, as right-wing DISY and communist AKEL voiced diametrically opposed views on how the semi-governmental telecoms organisation should be run.
The debate in Parliament concerned the supplementary budget of £27.99 million, of which £27.77m will go to covering the shortfall in CyTA’s pension fund.
Although the budget was approved by unanimous vote, DISY used the opportunity to insist on changes to CyTA’s ownership status.
The party would like to see CyTA gradually denationalised.
While in 2005 the pension fund was £27.7m in the red, the organisation’s profits were only £25m.
DISY’s no2 Averoff Neophytou said CyTA’s profit margin was diminishing by the year; back in the year 2000 the surplus had stood at £70m.
Forty-two per cent of CyTA’s operating costs now went toward covering the pension fund’s deficit.
“For every £100 that is paid in wages, another £42 go to the pension funds,” Neophytou said.
“Without realising it, CyTA is inexorably going down the same path taken by Cyprus Airways.”
He was referring to the struggling national carrier, which the government is battling to keep afloat through a restructuring plan and heavy loans.
While conceding that CyTA’s finances were in trouble, AKEL deputies accused DISY of blowing matters out of proportion.
“We all know that DISY has a permanent fixation with privatising CyTA,” remarked AKEL’s Stavros Evagorou.
He added his party would never consent to the “selling out” of state property.
For his part, EDEK deputy Marinos Sizopoulos pointed out that CyTA pensions were calculated according to an employee’s salary instead of his/her social insurance contributions.
Figures published in 2005 showed that the highest paid people in the main semi-government organisations were 126 people on the A13 pay scale at CyTA, who cost the state £55,746 per year, or £4,465 a month to employ. The figure included the employer’s contribution to social insurance of around 3.2 per cent, plus the cost of pension funds, which still leaves the employee with a monthly pre-tax salary of over £4,000.
The numbers also showed that workers in the sector earn nearly three times as much as the average wage in the private sector, which stands at around £650-£700 per month.
