Prepared by Zuzana Brixiova.
In 1995, two units for implementing the PERD statute were created: (i) Parastatal Monitoring Unit (to monitor public enterprises), and (ii) the Privatization Unit (to handle the divestiture of public enterprises).
In the case of the Nile Hotel, the buyer did not meet the terms of payment specified in the contract, and the hotel was repossessed by the Privatization Unit. It is now again on the list of enterprises to be put up for privatization.
This does not include sales of enterprises with only partial foreign participation.
If the enterprise is fully owned by the government, it is first transformed into a limited-liability company.
In 1980, the nationalization decision was reversed, and in some cases joint ventures between the government and the former owners were initiated.
The 1997 amendment of the PERD statute states that “there will be a moratorium on new government investments in enterprises that are to be privatized except for financial and operational restructuring measures necessary to prepare the enterprise for sale.” Consequently, restructuring measures are limited to reducing liabilities and laying off workers.
On occasion, the DRIC has been forced to reverse its decision, owing to subsequent legal rulings. A recent example is Apollo (Sheraton) Hotel, where DRIC’s decision was reversed by the Inspector General of the Government. The DRIC ultimately awarded the contract to another bidder.
In some cases, the buyer has violated the contract by engaging in more risky projects than outlined in the business plan that was part of the contract and, consequently, could not make the agreed payment on schedule.