18 JULY 2013Balkans.com
Montenegrin prime minister urged to save bankrupt aluminum plant, KAP
Edited by : AL CIRCLE
2 min read
Montenegrin Prime Minister Milo Djukanovic on Tuesday blamed parliament for stalling the rescue of the bankrupt Podgorica Aluminum Plant, KAP.
Djukanovic said owing to the lack of cooperation between parliament, the state run Power Industry and the factory, the government had been forced to halt production in KAP.
Djukanovic said there is still room for restructuring the plant. But for this to be achieved, MPs will have to agree on a way for the KAP to settle its debt towards the Power Industry.
Opposition parties and the junior party in the government, the Social Democratic Party, have opposed a budget review that the governing Democratic Party of Socialists, DPS, is trying to pass in order to tackle the fiscal instability caused by the plant's debts.
KAP's debt towards the Montenegrin Power Industry alone is more than 40 million euro, which is why power supplies to the factory were cut off in late February.
In the meantime, the plant allegedly maintained production until June by stealing power from the European distribution network.
On Thursday, police detained Dmitry Potroubach, head of finances in the KAP, on suspicion of having enabled the alleged theft.
In his address, Djukanovic rejected what he termed frequent misinterpretations of the plant's situation.
"The public has been bombarded with well-known constructions that the KAP was a pest that spends tax payers' money, fills the pockets of Russian taycoons, while the government allows all that because it is corrupt," Djukanovic said.
Since 2005, the majority of KAP's shares have been owned by Russia's Central European Aluminum Companies, CEAC, and by the Montenegrin state.
Last year, parliament envisaged the termination of the contract with CEAC, which the plant's management, composed of Russian representatives, then rejected.
The plant was officially declared bankrupt on July 8. On Wednesday its 1,200 workers were all fired, although they will continue to go to work for the following month, media reported.
Djukanovic said that it was not realistic to expect that, if the factory continues operating, to do so with no more than 500 workers.
In the period between 2006 and 2012, the losses of plant amounted to almost 100 million euro, while its debts are more than 300 million euro.
Djukanovic said owing to the lack of cooperation between parliament, the state run Power Industry and the factory, the government had been forced to halt production in KAP.
Djukanovic said there is still room for restructuring the plant. But for this to be achieved, MPs will have to agree on a way for the KAP to settle its debt towards the Power Industry.
Opposition parties and the junior party in the government, the Social Democratic Party, have opposed a budget review that the governing Democratic Party of Socialists, DPS, is trying to pass in order to tackle the fiscal instability caused by the plant's debts.
KAP's debt towards the Montenegrin Power Industry alone is more than 40 million euro, which is why power supplies to the factory were cut off in late February.
In the meantime, the plant allegedly maintained production until June by stealing power from the European distribution network.
On Thursday, police detained Dmitry Potroubach, head of finances in the KAP, on suspicion of having enabled the alleged theft.
In his address, Djukanovic rejected what he termed frequent misinterpretations of the plant's situation.
"The public has been bombarded with well-known constructions that the KAP was a pest that spends tax payers' money, fills the pockets of Russian taycoons, while the government allows all that because it is corrupt," Djukanovic said.
Since 2005, the majority of KAP's shares have been owned by Russia's Central European Aluminum Companies, CEAC, and by the Montenegrin state.
Last year, parliament envisaged the termination of the contract with CEAC, which the plant's management, composed of Russian representatives, then rejected.
The plant was officially declared bankrupt on July 8. On Wednesday its 1,200 workers were all fired, although they will continue to go to work for the following month, media reported.
Djukanovic said that it was not realistic to expect that, if the factory continues operating, to do so with no more than 500 workers.
In the period between 2006 and 2012, the losses of plant amounted to almost 100 million euro, while its debts are more than 300 million euro.
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