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FONDUL PROPRIETATEA URGES PRESIDENT IOHANNIS TO NOT PROMULGATE THE PORTS LAW
Fondul Proprietatea (“the Fund”) has sent a letter to President Klaus Iohannis outlining several reasons that constitute, in the Fund’s view, a strong basis for the non-promulgation of the recently adopted law amending the Government Ordinance no. 22/1999 on ports, as it presents a serious obstruction to the economic development of all Romanian river and sea ports, a press release sent to ACTMedia reads.
The Fund’s argumentation is based on both constitutional and economic grounds, pointing out several unconstitutional provisions of the law, in addition to its negative economic impact and unfair privileges generated for port operators.
From a constitutional perspective, in the Fund’s view, the ports law breaks:
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Multiple principles safeguarding the economic liberty, free market economy, freedom of trade, fair competition, as well as non-discrimination – as the law freezes the rents at the current minimum levels for the next 10 years, favoring a limited number of port operators who will benefit from these tariffs.
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The principle providing that justice shall be rendered by the courts of law. The law allows the set-up of a Supervisory Body which will have the power to judge over potential conflicts between port operators and port administrations, thus creating a substitute for Courts of Law, which is unconstitutional. Moreover, its decisions are to become immediately enforceable, thus granting this new entity discretionary powers.
In addition, the Fund underlines the economic reasons underpinning the need for the re-examination of the law by Parliament:
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It creates the premise of a huge transfer of value from state controlled port administrations to private port operators.
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Rent fees and their structure should be decided by supply and demand, not by law, which represents an extremely dangerous precedent.
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It restricts the fair competition and equal opportunity for both existing and new investors/operators, thus limiting the development potential of Constanta Port and all other Romanian ports on the Danube and at the Black Sea.
Commenting on the damaging potential consequences of the implementation of the Ports law, Greg Konieczny, CEO and Portfolio Manager of Fondul Proprietatea, states:
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“Our estimates reveal that, in the case of Constanta Port alone, losses incurred by capping rents at a ridiculously low level, established in relation to the tariffs currently paid by the top five operators, would amount to EUR 26 million over the next decade. These five operators occupy 37% of the port’s surface and concluded their tenancy contracts many years ago, by direct negotiations. Only around 10% of the leased surface in Constanta Port has been attributed in transparent circumstances, through public tenders.
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Based on these facts and the numerous provisions of the law favoring port operators, it is not difficult to note that this law is dedicated to port oligarchs who will keep money in their pockets that would otherwise flow to the Romanian state if rents would be set according to free-market rules.
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Fondul Proprietatea urges President Klaus Iohannis to take into consideration the Fund’s argumentation on the extremely harmful impact of this law for the Romanian state and take a decision to either send the law to the constitutional court or for re-examination in the Parliament.”