slovak spectator 1718

8/6/2019 Slovak Spectator 1718

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Ministers fume over Telekom 'no'

A GOLDEN hen without any abilityto lay golden eggs is how Slovakiaseconomy minister described thecountrys telecoms giant in responseto a decision by its majority share-

holdernot topay the 258 million individends demanded by its minorityshareholder,the Slovakstate.

Deutsche Telekom, which owns51 percent of the shares in SlovakTelekom, said an offer it had tabled

was appropriate and that the com-pany was open to further negoti-ations with the minority sharehold-er.It outvotedSlovakiaat thegeneral

meeting held onApril28 andblockedthe requested dividend of 258 mil-lion which the Economy Ministrysaid could come from SlovakTelekom's retained earnings anddividends.

Ministers said there was no reas-onfortherefusal.

SeeSTpg4

NEWS

AmnestieschallengeKDHis proposinga consti-tutional lawto overturn theso-calledMeiar amnesties,createdby thethenactingpresident to blockinvestig-ation ofserious crimesal-legedly committedin themid 1990s.

pg 2

Notfitto fight?Seriousquestions are beingraised,notleastby thede-fenceminister,aboutSlovakia'sability to equip

itsarmedforces,andmeetits commitmentsto NATO.pg 3

OPINION

Littlereasonto smileEventhose whodidnot votefor President Gaparovimust have hopedthathewouldat leastmaintainsome dignity forthe insti-tutionof thepresidency.

pg 5

BUSINESSFOCUS

Sourcingins andouts

The popularityof out-sourcing rosein Slovakiaduringthecrisis, asfirmssoughtto cutcosts,but fig-uresshowinga risein in-sourcing suggest thattheremayhavebeensomebadexperiences.

pg 6

ManagingfacilitiesDemandin Slovakiafor fa-cilitymanagement is grow-ing,sayexperts,and oneofthe country'sleading uni-versities is now offeringcourses to trainprofession-alsin thefield.

pg 7

CULTURE

More thanapiperBritishmusician MerlinShepherdrecently playedwiththe PressburgerKlezmerBand in Bratislava.He spoke to TheSlovakSpectator about what play-ingmusicmeansto him.

pg11

Slovakiaemergedfromthe preliminaryroundof theIce Hockey WorldChampionship - beingheldthis year,forthe firsttime,in BratislavaandKoice- withone win(againstSlovenia)and twolosses(againstGermanyandRussia, above).The teamhas progressed tothe qualifyingroundbut in order toreach thequarterfinalsmustover-come a pointsdisadvantagecarriedoverfromthe preliminaryroundand dobetterin matchesagainstits historicrival, theCzechRepublic, andthen Finland andDenmark. Photo:TASR

Harabin critic tapped

for NB tob job A STERN critic of Supreme Courtpresident tefan Harabin, PeterPaluda, has been chosen by the rul-ing coalition party Freedom andSolidarity (SaS)as itsnomineeforthetop postat Slovakias vetting author-ity, the National Security Office(NB). Paluda, a Supreme Courtjudge and Slovakias former repres-entative to the European Unionsjudicial watchdog Eurojust, seemslikely to win approval from otherruling coalition parties, with Prime

Minister Iveta Radiov alreadybacking his nomination.

Filling the top job at the NBhas proved rather a tricky under-taking forthe ruling coalition. Afterfacing criticism for its failure toremove Frantiek Blanrik, an al-leged former agent for the com-

munist-era military intelligenceagency, earlier this year, SaS pro-posed Jn Stano. But Stano did notappeal to the other ruling parties

because of his previous involve-ment with the Slovak InformationService (SIS), now the country'smain spy agency, during its periodunder Ivan Lexa, one-time right-hand man of controversial formerprimeminister VladimrMeiar.

SeeNBpg2

Vol. 17, No. 18 Monday, May 9, 2011 - Sunday, May 15, 2011

FOCUSof this issue

On sale nowOn sale now FOCUSof this issue

OUTSOURCING

Commissionto scrutinise

tax lease deal

THE RESIGNATION of Miroslav Mikulkfrom the top post at Slovakias Tax Director-ateover a dubiousfive-year, 6.6-million of-fice leasing deal with a firm co-owned by aregional official of the ruling Slovak Demo-cratic and Christian Union (SDK) has notresolved the issue of whether tax offices inKoice will remain in their original sites ormoveinto a single shared building.

A five-member commission consistingof representatives of the Ministry of Fin-ance and the Tax Directorate will now re-

view how the directorate proceeded in set-ting up the rental deal. Finance Minister

Ivan Miklo (SDK) has said he wants toinvite the head of parliaments financecommittee, Jozef Kollr, of Freedom andSolidarity(SaS), to jointhe commission.

An analysis that the Tax DirectorateandtheSDKhas used todefendtherentalplan for the Koice tax offices has comeunder scrutiny with ruling coalition part-ners expressing doubts about its findingthat moving all the offices into a shared

buildingwould be thebest option.

SeeTAXpg9

BYBEATABALOGOVSpectator staff

Bin Ladendeath meansextra security

CONCERNS about possible revenge by al-Qaeda following the death of its leader,Osama bin Laden, have led to a tighten-ing of security measures at the top eventcurrently taking place in Bratislava and

Koice the Ice Hockey World Champi-onship.Interior Ministry spokesman Gbor

Grendel saidthat Slovak policewouldmoreclosely guardthe US Embassy in Bratislavaas well as members of the US ice hockeyteam which was playing in the qualifica-tion roundof thetournamentin Koice.

SeeICEpg3

BYMICHAELATERENZANISpectator staff



SLOVAK BUSINESS DIRECTORY

Contacts to more than 2,600 companies in 106 categories

SELECT FOREX RATES benchmark as ofMay 5

CANADA CAD 143CZECH REP CZK24.19RUSSIA RUB40.42GREAT BRITAN GBP 0.90

HUNGARY HUF 265.26JAPAN JPY 118.20POLAND PLN 3.95USA USD 148


2/12

No instruction toMPs onGPvote

THE SCHEDULEDparlia-

mentaryvotein Mayto electa new prosecutor generalwill beby secretballot andMPsfromthe governingco-alition will receiveno in-structionson howtheyshould vote,Prime MinisterIveta Radiovsaidon May3,the SITAnewswire reported.

Thevote willconductedin compliance witha recentrulingby SlovakiasConsti-tutional Court whichfoundthat twosuchvotes inDecemberlast yearwere un-constitutional because therulesof the secret ballotwere violated.

Therepeatvoteis expec-tedtobeheldonthefirstday

of parliamentsupcomingsession, May18. Thejointcandidate of thegoverningcoalitionparties is Jozefent,who willstandagainstthe previous generalprosecutor,DobroslavTrnka.

Radiovhas statedthatif

Trnka isapprovedby parlia-ment shewillresign asprimeminister.

Ina secretballotinDecember, Trnkacame with-inone vote ofstaying inhispost,whichthenexpiredinFebruary. Because someMPsfromthe governing coalition

wereconcernedthat Trnkamight bere-elected inthesecretballotthey tookpho-tosof theirballot papersandpublishedthem to provethey hadnotvotedforTrnka.

The ruling coalitionpasseda bill tochangeparliamentsstandingorderstoallowfor a public, recor-dedvoteto elect theprosec-

utorgeneral. President IvanGaparovivetoed the legis-lationandreturnedit topar-liament. Nevertheless, theConstitutional Courtsrulingmeans a secretballot will beused inthe upcoming vote.

Sme ordered to pay Slota 10,000

THEREGIONAL Courtin ilinahasconfirmeda rulingbythelocaldistrictcourtthat orderedtheSmedaily topay10,000indamagesto thechairmanoftheSlovakNationalParty(SNS),JnSlota,fortwo art-iclesit publishedin 2008.

The caseinvolvedarticles

entitled Slota stolewhile es-capingand PN:Slotasackeda store,theSITAnewswirewrote.

The ruling also orderedSme to pay Slotas legalexpenses, apologise tohim, and remove the elec-tronic version of the art-icles from its internet site.

Sme wrote that the in-formation it publishedabout Slota stealing cars

came from communist-era secret service files andhad been provided by hisfather.

Cocaine worth 6m seized at airport

SLOVAKcustomsofficersseizeda largequantityof co-caineas it enteredSlovakia,hidden inside stonestatuettesof birds,the TASRnewswirereportedonMay 2.

OnApril29 customs of-ficerscheckedan aircon-signment fromBrazilto aSlovakcompanyfoundedlessthan a monthearlier.

Thecompany'schiefexecutive is a 45-year-oldSlovakcitizenwho wasar-restedthe same daynearthepremises ofa shipping com-panyat MilanRastislav

tefnik InternationalAir-port inBratislava,saidtheCustoms Directoratesspokesperson, MiroslavaSlemensk,as quotedbyTASR.

The consignment offi-ciallydeclared eightmetalbarrelsandtwo woodencontainers withprocessedgemstonesand productsmade ofstone.

Theshipmentdid in-cludestone statuettes but37of themwerehollowedoutand anX-raycheckde-tectedthe cocaine about32 kilogramsin all.

Itwas estimatedthatthevolume of seizedco-cainecould have providedabout 550,000 dosesandhada streetvalueof about

5.92million. Slemensksaid thearrested mancouldface life inprison.

Compiledby Spectatorstaff

frompress reports

KDH tries again to scrapMeiar amnesties

ONE OF THE ruling coalitionparties, the Christian Demo-cratic Movement (KDH), isagain trying to push throughan initiative to cancel twoamnesties issued in 1998 by

Vladimr Meiar, who was atthe time both prime ministerand acting president. Knownas the Meiar amnesties,through them theacting pres-ident granted an amnesty tothe unidentified organisers ofthe kidnapping of the son ofthe then-president, MichalKov. The KDH submitted aproposed constitutional lawto the filing room of parlia-ment onApril29.

Parliament todebatetheamnestieswithoutHZDS

The controversies of theMeiar era, especially those ofhis third government in1994-1998, have long been apreoccupation of the ChristianDemocrats and they have at-tempted to cancel his am-nesties five times, on the firstoccasion in February 2000. Butthis latest attempt is the firstto come before a parliament in which Meiars party, theMovement for a DemocraticSlovakia (HZDS), is not repres-

ented. Support for the HZDSfell below 5 percent in lastyears general election and theparty therefore won no seatsin parliamentfor thefirsttimesince its formation. The cur-rent government also took upthe obligation to try and can-cel the amnesties in its pro-grammestatement.

The draft lawproposesthecancellation of two amnestiesgranted by Meiar in 1998that covered the act of abduc-tion itself and other acts re-

lated to the kidnapping,Daniel Lipic, the KDHs vice-chair and current interiorminister, told a press briefinggathered at a memorial crossin the Bratislava district ofKarlova Ves that marks thespot were Rbert Remi wasmurdered in 1996. Remi

was the key go-between witha leading witness in the caseof the kidnapping of MichalKov Jr in 1995. Investiga-tion ofRemideathwas also

blockedby the amnesties.

Even after such a longperiod it is necessary thatjustice is given a chance inan independent court,Lipic said, as quoted by theSITAnewswire.

Controversial amnesties

Meiar granted the am-nesties during his brief pres-idential incumbency to ab-solve the unidentified per-petrators of the abduction offormer President MichalKovs son to Austria in1995. President Kov was atthe time engaged in a bitterpolitical struggle withMeiar; his son was, at the

time, wanted for questioningin Germany regarding an al-leged crime of which he waslatercleared.

Investigators believedthat the boss of the countrysSIS intelligence service, IvanLexa, masterminded the kid-nap ping a nd L ex a sub-sequently faced several seri-ous criminal cases includingabduction, sabotage, rob-

bery, treason, misuse ofpower and other white-collarcrimes,SITA wrote.

SeeLAWpg9

NB: Some clearances might be revisedContinued frompg1It was during the Lexa period that the

SIS was accused of involvement in nu-merouscriminalactivities.

Were convinced that were submit-ting a candidate to our coalition partnerswho is an honest person with good repu-tation and is a respectable expert at thesame time, said SaS leader Richard Sulk,as quoted by the TASR newswire, whenintroducing Paluda on May 3. Hes aguarantee that security clearances willalwaysbe granted inlinewith thelaw.

Paluda, who has a law degree fromBratislavas Comenius University,served as prosecutor at the district andlater regional prosecution offices in

Bansk Bystrica. In 1994, he was appoin-teda Supreme Courtjudgeandin 2004 he became Slovakias representative inEurojust, only to be recalled in a powerstrugglein 2007.

Radiovs spokesman Rado Baoconfirmed to the Sme daily on May 3 thatthe prime minister considers Paluda agood nominee for the post. So does theleader of Most-Hd, Bla Bugr, althoughSme reported that he had some reserva-tions about the way Sulk announced thenomination viathe media beforeinform-ing hiscoalitionpartners.

Paluda is a long-time opponent of Ha-rabin, another ally of Meiar who waselected to lead the Supreme Court underthe previous government. In 2007, Hara-bin recalled Paluda from Eurojust. WhenPaluda filed a criminal complaint against

Harabin for abuse of power, Harabin re-sponded by instituting disciplinary pro-ceedings against him. Those proceedingslast year attracted representatives fromthe embassies of the United States, GreatBritain, the Netherlands and Denmark to

the courtroom, amid domestic and inter-national concern about the state of theSlovak judicial system and the alleged in-timidation of judges, including Paluda,who opposedHarabin.

Paluda is also one of four Slovakjudges who lodged a complaint with theEuropean Court of Human Rights inStrasbourg challenging the election of Ha-rabin tothe SupremeCourtpresidency.

Paluda, in a brief interview withSme, suggested that he might launch alegislative initiative to ensure thatpeople who deliberately collaborated

withthe tBcommunist-era secretpoliceare automatically made ineligible to re-ceivesecurityclearance.He alsosaid thathe might re-evaluate security clearances

given to people who demonstrably co-operatedwith the tB.

Troubledbackgrounds

Frantiek Blanrik, who was nomin-ated by Meiars Movement for a Demo-cratic Slovakia (HZDS) when it was partof thelastgovernment,was, accordingtodocuments found in communist-eraCzechoslovak security archives inPrague, an informer for the communist-era military intelligence service. Hedenied being an informer but resignedfrom his job on March 7. His departurecame on the heels of a series of articlespublished by the Sme daily highlightingthe fact that the ruling centre-rightparties, when in opposition, had beenhighly critical of Blanriks continued

presence at the NB following the ori-ginal revelations about his past in late2008, but had not moved to replace himsincetaking office.

The right to nominate someone tothe NB post lies with the SaS party,

which during its 2010 parliamentaryelection campaign presented itself ashaving zero tolerance for former com-munist agents.

Blanrik himself was given a full se-curity check by the NB in 2006 and wascleared to access the highest-level in-formation,labelledtop secret.

According to communist-era docu-ments disclosed in 2008, Blanrik

worked as an informer for the VKR, thecommunist predecessor to todays Milit-ary Defence Intelligence (VOS) or Milit-ary Security Agency, between 1981 and1989, and reported on at least 10 people,Sme reported.

Based on legislation currently inforce, his activities during communism

would have disqualified Blanrik frombeing installed in such a sensitive posi-tion had the information been dis-coveredprior to hisappointment.

According to Sme, while in officeBlanrik also approved several securityclearances for former tB agents, includ-ing Svatopluk Ratusk, who served assecretary of the National Security Coun-cil under the Fico government. Duringthe communistregime Ratusk servedasa military border guard whose job it wasto stop people trying to escape to West-ern countries. Under the government of

Vladimr Meiar, Ratusk allegedly par-ticipated in the 1995 abduction of the sonof then-president Michal Kov.

After SaS nominated Stano, the partydefended the nomination by saying thatStano was employed only as a clerk in a

low-profiledepartment.Stano confirmedthat he was a staff member of SISs cent-ral analytical section, which he said atthat time was involved in protecting thecountry from the activities of foreign in-telligenceservices.

VladimrMeiar Photo:Sme - TomBenedikovi

2 NEWSMay 9 15, 2011

Slovakia ranks 36th in press freedom

AN INTERNATIONAL watch-dog organisation,FreedomHouse,putSlovakiain 36thplacein itsannualworldsurveyof press freedomre-leasedon May3, WorldPressFreedomDay.

During2010 the organ-isationassessedwhether196countries hadfree andinde-pendentmedia.Slovakia

shared36th placewithCyprus, Lithuaniaand Malta.The CzechRepublicplaced26th,Poland48th, andHun-gary,stronglycriticisedbyFreedomHouse,was 65th,the SITAnewswire reported.

In 2009,Slovakiaranked43rdtogether withLatvia,Surinam, Taiwan,TrinidadandTobago, andVanuatu.


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Minister sounds alarmover state of the army

SLOVAKIA marked seven years of NATO membershipthis spring in an atmospherethat was characterised more

by desperation than joy forthe countrys armed forces.The defence budget has beencut year after year since 2004,to the alarm of Slovakias sol-diers and its allies. Now some,most notably Slovakias de-fence minister, are warningthat a crisis is approachingand severe cost-cutting

measures including reducedparticipation in foreign mis-sions maybe necessary.

Given the long-term de-cline in funding and the de-clining usability of much of itsmilitary hardware, the De-fence Ministry launched aStrategic Defence Review(SHO) in the autumn of 2010 inorder to get a clear picture ofthe state of the armed forcesand work out how to adjustthem to meet current securitythreats as well as the financialcapacitiesof thestate.

This process tries toidentify possible threats, op-tions and capabilities, and finda balance between restricted

fiscal capacities and an effect-ive, functioning, well-equipped Slovak ArmedForces, Samuel Arbe, the ex-ecutive director of the Centrefor European and North-At-lantic Relations (CENAA), anon-governmental think tank

which has been following theprocess of strategic evaluation,toldThe Slovak Spectator.

The SHO is expected to befinalised in the summer of2011 and presented in theform ofa Defence WhiteBook,

but some information hasbeenalready madeavailable.

Disturbingearly results

According to the BasicFindings of the AnalyticalPhaseof theSHO,which isthefirst major output and wasmade available in April 2011,the military technology used

by the armed forces is out-dated. Over 70 percent of theSlovak militarys ground-

based technology is in prac-tice too old to be used, and itshelicopters and MiG-29 super-sonicjets arefast approachingtheir best before date. An-other long-term problem isthe armed forces consistentfailure to attract highly-quali-fied personnel such as health-care specialists.

This year, 86 percent of

the defence budget will go onobligatory expenses, i.e. salar-ies, payroll taxes, energy andother such outlays, Ministerubomr Galko told a pressconference after presenting

the findings of the analysis.Only14 percentis availableforallother development,includ-ing missions. Foreign opera-tions absorb 4 to 5 percent ofthebudget.

If we do not pass a majorstrategic decision next year,this balance will changeto 90to 10. And that is in factliquidation, Galko con-cludedbluntly.

Financialmalnutrition

The underfunding of theSlovakArmedForces hasled todeficits in several areas,mainlyin terms ofmilitaryin-frastructure and modernisa-tion, as well as personnel andmorale, said Ivo Samson, ananalyst with the Slovak For-eignPolicy Association(SFPA),another non-governmentalthink tank, in an interview

withThe Slovak Spectator.Shortly before the

countrys accession to NATOin March 2004 the Slovak gov-ernment made a gentlemensagreement with NATOheadquarters in which itpledged that the defence

budget would not drop below

2 percent of GDP at any pointin the future. But the Slovak Armed Forces leadership ad-mits that there now is a hugedifference between theirplanned financial resourcesand the budgetary reality, asthe real contribution fromthe state budget has fallenfrom 1.87 percent of GDP in2002 to an anticipated 1.08percentin 2011.

That amount is not suffi-cient even to maintain the op-erational readiness of thearmed forces, not to mentionany investment or modernisa-tion, Arbe said. Slovak gov-ernments have attempted toexplain the falling percentage

of GDP spent on defence bypointing to a rise in GDP over-all, butthatexcuseis nolonger

valid, he added, since GDP isgrowing slowly while defence

budget cutsremainenormous.

NATOidentifiesunderfunding

Slovakias ability to fulfilits obligations towards NATO

were recently criticised byone of the alliances mostsenior representatives, FrankBoland, the Head of ForcePlanning Department ofNATO Defence Policy andPlanning Division, during a

visitto Slovakiain February.But foreign pressure does

not seem to have much effect,Arbe noted, with Slovak gov-

ernmentscontinuing to ignoreexternal requests and remain-ing blind to potential or actualthreats to Slovakias territory.Those threats are not exclus-ively of a military nature, hesaid, pointing out that naturaldisasters may also cause civil-ian casualties, in which casethe armed forces should beprepared to react.

If the current trend issustained, in a couple of yearsthe Slovak army will perhaps

be unable even to fight a[forest] fire similar to the re-cent one at Star Hory, in late

April 2011, Arbesaid.However, Rastislav Ker,

thepresidentof theSlovakAt-

lantic Commission, a non-governmental think tank,and former ambassador ofSlovakia to the USA, insistedthat, despite its failure to ful-fil its declared obligations,Slovakia remains a full-fledged NATOmember.

And from the legal pointof view it would remain so,even if we did not have anyarmed forces, like Iceland,Ker told The Slovak Spec-tator. Nevertheless, he notedthat the actual weight ofSlovakias voice in the alli-ance is relatively dependenton the countrys ability tostick to its own obligationsandfulfil them.

We cannot rest assuredthat we can go out for a beer

with a cool bunch of friendsand there will always besomeone else to pay the bill,Ker commented.

Slovaksoldiersmight comehome

One of the things thathelps maintain a positive im-age for Slovakia among its al-lies despite the underfundingof the armed forces is its par-ticipationin foreignmissions.

Slovakia usually contrib-utes engineers, and there areunits within the Slovak

Armed Forces who are re-spected as experts in demin-ing and infrastructure con-struction. Apart from these,Slovakia also contributesguard units and military po-liceunits.

At the moment Slovakia

is participating in three ma-jor foreign operations: ISAFin Afghanistan (NATO), UN-FICYP in Cyprus (UN) and

ALTHEA in Bosnia andHerzegovina(EU). Apartfromthese, Slovak soldiers parti-cipate in various observermissions, the Defence Min-istry told The Slovak Spectat-or. According to the min-istry,at thebeginningof May2011 there were 561 Slovaksoldiers serving abroad, of

whom 313 were in Afgh-anistan, 198 in Cyprus and 45in Bosnia andHerzegovina.

Samson highlighted theparticular importance ofSlovakias participation in

the key NATO mission inAfghanistan.But due to limited finan-

cial resources the deploy-ment of the Slovak contin-gent in Afghanistan isprovided at the expense ofmodernisation and transpar-ent defence planning, whichmakes Slovakia look like aconsumer of collective de-fence rather than an activecontributor in the eyes ofNATO headquarters, SamsontoldThe Slovak Spectator.

Although they benefitSlovakias image, foreignmissions are costly and Min-ister Galko has already

warned that unless the de-

fence budget is increasedSlovakia will need to end itsparticipation in some ofthem. He has said that thefirst soldiers to come home

would probably be those cur-rently serving in Cyprus, asthe mission there is increas-ingly costly and in comparis-on with the other two has aloweffecton the trainingandpreparedness of soldiers intothe future.

Samson said withdrawalfromCyprusshouldbe lookedon as a reaction to the insuf-ficient support currentlyprovidedto Slovak troops tak-ing part in NATOs interna-tional operations.

If Slovakia wants tomaintain at least a minimumof its duties towards NATO,scrapping the UN-led Cyprusmission is good news, Sam-sonsaid.

BYMICHAELA

TERENZANI

Spectatorstaff

TheSlovakarmy'shardwareis ageing. Photo:Sme - J.Krolk

ICE: US team getsmore protectionContinuedfrompg1

InteriorMinister DanielLipic discussedthe matter

bytelephonewith US Ambas-sadorTheodore Sedgwick,whowelcomedtheinformation,Grendel said,asquoted bytheTASRnews-

wire,addingthat thepolicewillevaluatethe situationasit develops andadjustmeas-uresto current needs.

Experts onterrorismdonotbelievethat Slovakiais inimminentdangerof terroristattack. ButGeneralAndorndor, the former headofthe Czechmilitary intelli-genceservice,did notruleoutthe possibility thata rad-icalised individualmightat-temptsometype of action.

Theremightbe revenge

onthe part ofthosewhowillmournthe loss oftheiricon,ndorsaid, asquoted bytheSmedaily.

GuantanamoprisonersinSlovakia

Newsof binLadensdeathreachedSlovakiaonlyafewdays afterBritain's DailyTelegraphpublishedseveraldispatchesreportedto befromthe US Department ofDefense concerningthe USprison inGuantanamoBay inCuba that hadbeenleakedbythe WikiLeakswhistleblow-inginternetsite.The three

former Guantanamoprison-erswho weretransferredtoSlovakiain 2010were men-tioned in thedocuments.

According to theWikiLeaksdocuments, twoof themen currentlyhold-ing permanentresidencepermits inSlovakiahadlinkswithterrorist organ-isationsand oneof themhadbeen reportedat onetime tohaveservedasOsama binLadenspersonal

bodyguard,Sme reported.That particularinformation

wasneverconfirmedormentioned furtherin otherleaked documents.US au-thoritiesdecidedto release

thethree menfromGuantanamolast year.

Robert Kalik,whoserved asinteriorminister

whenSlovakauthoritiesagreedto accept the three

men,statedthat theWikiLeaks informationgently said,doesntcorres-pondwith thetruth, Sme

wrote. Smealso wrote thatthe current interiorminister,Daniel Lipic,reiteratedthatthe former prisonerspose nosecurityrisk to Slovakia.

ReactionsfromSlovakofficials

Slovakiashighestgov-ernment officialsreactedpositively tothe news ofbinLadens death. TheForeign

AffairsMinistrycalledhisdeatha veryimportant suc-cess inthe fightagainstter-

rorism which it saidhelpsfulfil effortsto strengthenglobal security.

Thisnews bringsnotonlysatisfaction anda feel-ingof justice tothe familiesandclose ones ofthe peoplewhowere victims ofterror-ist attacks planned andex-ecuted by al-Qaeda, but italsorepresents hopethatthe hatefulcampaignwiththe intention to spreadhatred andconfrontationamongnationsand civilisa-tionswill depart togetherwithhim, the Foreign Af-fairsMinistrystated,addingthat asthe leaderofthe al-Qaedaterrorist networkbin

Laden wasresponsible formostof theworst terroristattacks, including theSeptember11, 2001attacksin theUnited States.

SlovakPresidentIvanGaparovisaid in hisreac-tion that justice hadbeendone with thekillingof theal-Qaeda leaderbut cau-tionedthat the terrorist or-ganisationliveson andbinLaden's successormay turnout tobe evenmore ag-gressive.

Thetrue victory willliein destroyingthe al-Qaedaterroristnetworkaroundtheworld.Thisis what wemust allcontinue to

pursue,Gaparovi said,asquoted by TASR.

3May 9 15, 2011NEWS

Slovakpolicewillclosely watchthe US Embassy. Photo:Sme


4/12

Bohunice prepares for EU tests

JASLOVSKBohunicemeets

safetycriteriaregarding nat-uraldisastersand accidentsaswellas thesafety ofcitizens,Prime Minister Iv-eta Radiov saidafter visit-ingthe nuclear powerplantonMay 3,adding that thefa-cilityfulfilsthe basicindic-ators forthe stressteststhatallnuclear facilitieswithintheEU must completeby theendof 2011,the TKnews-wirereported.

Investments of 500million are planned fortheJaslovsk Bohunice powerplantto increaseits safetymargin andsecure successinthe EUstress tests,TKadded.

Anew nuclearplant thathasbeenplannedforthe

same site will bedelayedby

at leastfive years, accordingto Slovakia'sNuclearRegu-latory Authority(JD), be-cause ofa delayin preparingthefeasibility studyfor theproject and theexpectednecessityof establishingnewsafety parametersafterthestresstestsarecom-pletedat allEU nuclearpower facilities.

Thenewpowerplantwould occupythe sitewhere Slovakiaphased outtwoolder unitsof theV1powerplant in JaslovskBohunice in western Slov-akia asa conditionforenter-ingtheEU. TheJDstated itdoes notexpectthe newfa-

cility to be launched before2025,TK wrote.

Austria and Germany open jobs

SLOVAKcitizensare nowable towork inAustria andGermanyunderthe sameconditionsas localworkersafterthe two countriesopenedtheir labour marketsonMay 1 tocitizensfromcentraland easternEU coun-tries,including Slovakia.

Austria andGermanywere thelasttwo EUcoun-tries toopen theirlabourmarkets,after keepingtheirdoorsclosed forthe maxim-

umperiodof seven yearsaftereight CEE countriesjoinedthe EUin 2004.

The SITAnewswirewrotethat the actionfinallyestablishes a singleEU la-bourmarket, allowing labourresourcesto move moresmoothly throughoutmem-ber states.

Accordingto datapresen-tedin March byVladimrSirotka, thepresident oftheSlovakAssociation of SmallBusinesses,60 percentofAustrianfirmsclose toits

borders withSlovenia,Hun-gary,Slovakiaand theCzechRepublic are interestedinhiringemployeesfrom thesecountries.

Sirotkasaid theopeningofthe Austrian andtheGer-man labour marketswillhelpreduce unemploymentin Slovakia,SITA reported.

Austria, facingan agingpopulation,hopes thattheopeningof itslabour market

willprovide itwitha fresh

sourceof labourandis expec-tedto tryto attract highly-qualifiedexperts as wellastakesteps to legalise illegal

workersin industrieslikeconstruction andcatering,according to SITA.

Germanyhas estimatedthat itmay seean influxof150,000 employees fromabroadwhileAustriais ex-pecting between13,000and25,000 new workers,primar-ilyin thefields ofconstruc-tion,mechanical engineer-ing andservices.

House andapartmentprices fall

THE PRICESof residentialrealestatein Slovakia fellinthefirstquarterof 2011 byacountrywideaverage of 2.5percentcomparedto thesame periodin 2010,and by0.47 percentfromthe finalquarterof 2010,the SITAnewswirereported.

Inthe fourthquarterof2010,residential realestatepriceshad fallen2.1 percentyear-on-yearand 2.6percentfrom theprevious quarter.

The countrywideaverageprice persquaremetreforresidentialproperty was1,264in thefirstquarter,accordingto informationre-leasedby theNational Bank

of Slovakia, whichmonitorsrealestate pricestogetherwiththe NationalAssoci-ationof RealEstate Agencies.

Lastyear, countrywideresidentialreal estateprices

fell3.9 percentin comparis-onwith2009.Pricesof realestatein Ni-

tra Regionincreasedthemost inthe first quarter,by4.5percentfromthe lastquarterof 2010 andreachedanaverage of602per squaremetre whichis stillthelowestaverage priceinSlovakiaseight regions.

TrnavaRegion postedthesteepestdeclinein averageprice,at 2.1percentoverthequarter, to846per squaremetre.BratislavaRegioncontinuedto havethehighest averageprice forrealestatein thefirstquarter,at1,694per squaremetrefor

residentialproperty,regis-teringa quarterlydecline of1.1 percent.


frompressreports

ZSSK cuts train serviceon more than 300 routes

THE FIRST days of May sawsignificant changes in passen-ger railway transport in Slov-akia.Following theadoptionofan extensive revitalisationplan earlier this year, the na-tional passenger railway com-pany, eleznin SpolonosSlovensko (ZSSK), launchedreduced train schedules as ofMay 1, though the cuts werenot as extensive as originallyplanned. These will not be theonly reductions: ZSSK has an-

nounced that more will followin December this year and inMarch2012.

The actual reduction was50 percent of the original planand its effectiveness wasdelayed after Prime MinisterIveta Radiov entered theprocess, ZSSK spokesperson

Alexander Buzinkay told TheSlovak Spectator, adding thatthe railway transport reductionhad been turned into a politicalissue. Negative reactions frommunicipalities and regionaladministration had led ZSSK tosoften thecuts,he said.

The changes, which cameinto effect as of May 1, affect

over 300 routes, the Sme daily wrote. ZSSK has eithershortened linesor reduced thefrequencyof trainson them.

The greatest number ofcuts took place in Trenn,Koice and Bansk BystricaRegions. Bratislava Region

was least affected, accordingto Buzinkay.

Some regional trains werecancelled, leaving only ex-press trains. Passenger ser-

vices on five lines were with-drawn, of which four were in

borderregions.ZSSK said it had cut the

least-used lines which were

generating the greatest losses.Buzinkay cited services

between Fiakovo and the bor-der with Hungary as an ex-ample, saying that the costs ofoperating this route were morethan 100 times higher than in-come from fares. He added thatthe reductions affected routes

where a bustransport alternat-ive exists. Where there was nosuch alternative, i.e. wherepeople have no other means ofpublic transport, ZSSK hasmaintained train services.

The reduced servicestranslate into 1.1 millionfewer kilometres travelled

annually,comparedto ZSSKsoriginal plan to reduce pas-senger transport by as muchas 2.2 million kilometres. In2010, ZSSK passenger trainstravelled a total of 31.1 mil-lion kilometres.

ZSSK reduced servicespartly because it is now re-ceiving less money from thestate budget to providetransport services in thepublic interest, as well as tofind solutions to its loss-making operations. It saidthat when deciding on re-ductions, it took into consid-eration the economic effi-ciency of individual lines,the number of passengers on

them, as well as the need tomaintain necessary publictransport routes.

ZSSKdiscussed the reduc-tion in train services withregions and municipalities,and said it received mostlynegative responses. Apartfrom reducing services, ZSSKalso plans to raise fares by 5percent on average as of Au-gust this year, and do thesame in the following two

years. The company has notconfirmed the exact extentof fare rises yet, the SITAnewswire reported.

SeeRAILpg9

BYJANALIPTKOVSpectatorstaff

Passengerrail serviceswerecut inSlovakiaon May1. Photo:Sme

ST: Parent firm 'willing to negotiate'Continuedfrompg1

Both Economy Minister Juraj Mikovand Finance Minister Ivan Miklo saidthat Slovakia isentitledto themoney.

The Economy Ministry owns 34 per-cent of the shares; the remaining 15 per-cent is in the hands of Slovakias privat-isation agency, the National PropertyFund (FNM).

TheSlovak Telekommadea netprofitof 120.9 million lastyear.

The representatives of the Germanshareholders have not explained theirdecision not to pay the dividends, statesa memo sent by Mikovs spokeswoman

Daniela Pirelovto TheSlovakSpectator.Mikov considers the situation thathas emerged to be an abuse of the telecomoperators dominant position, accordingto Pirelov.

The attitude of the German share-holder has unpleasantly surprised us andtaken us aback, said Mikov. SlovakTelekom today disposes of enough re-sourcesfromthe profitsof previous years

when it did not pay these [the retained-profitsas dividends]to itsshareholders.

Deutsche Telekom, the majorityowner of Slovak Telekom, says it is inter-estedin negotiating with theSlovakMin-istryof Economy.

Deutsche Telekom received, at shortnotice, a request from the Slovak minis-ter of economy to enter negotiations onthe dividends payout, Sylvia Braunle of

Deutsche Telekoms press departmenttold The Slovak Spectator. The negoti-ations commenced shortly before the an-nual General Shareholder Meeting andDeutsche Telekom made an appropriateofferduringthese talks.

This offer still stands and DeutscheTelekom is willing to continue talks withthe Slovak government, Braunle said,adding that the group will not commentfurther on internal discussions betweenshareholders.

According to Mikov, Slovakia cur-rently needs every spare euro to consol-idate its public finances and clear thedebts that the previous government ofRobertFico leftbehind.

Todays vote has only strengthenedmy conviction that Deutsche Telekom isabusing its status as the 51-percentshareholder and, at the same time, bythis attitude it has only confirmed the

fact that Slovak Telekom is perhaps agolden hen without any ability to laygoldeneggs,Mikovsaid.

The minister, who will shortly meetrepresentatives of the telecom concern,saidhe will insistthat DeutscheTelekomcorrects itsdecision.

Finance Minister Miklo has said heexpects the situation to change. But headded that the companys failure to paydividends would not in any way threatennext years state budget, the SITA news-

wire reported. The FNM, which also ob-jects to the decision of the majority share-holder, said that it had used all availablemeans to pass a proposal to pay dividendsat the general shareholder meeting, FNMrepresentative Miroslav Homola toldSITA. Miklo saidhe is stillconvinced thatthe remaining 49-percent stake of Slovak

Telekom should beprivatised.There are many reasons why thoseshares should be privatised, Miklo said,as quoted by the TASR newswire. This isone, althoughit isnot sosignificant. Tele-communications is no longer the natural

monopolyit used tobe;thereisno longeracauseforthestatetohaveanypartinit.

The proposed sale of the states re-maining stake in Slovak Telekom is not anew issue. The Slovak cabinet on March23 reviewed an analysis jointly prepared

by the Finance Ministry and the FNMconcerning the eventual sale of the hold-ing,perhapsto DeutscheTelekom.

The FNM stated that the government would not receive more from dividendsthan from the actual sale of its ownershipstakein SlovakTelekomandsaidsaleofthe49-percentstakecould be completedby theautumn of 2012. The state is consideringtwo options: the first is an international

tenderwith allthe states shares being soldas a block, giving Deutsche Telekom theoption to take full ownership. The otheroption is to sell the state-owned shares inthe capital market, a process which wouldresult inmany smallershareholders.

That could aid the development ofthe stock market, as we expect thesestocksto belistedonthe Bratislavasecur-ities exchange, Miklo said earlier this

year,as quotedbyTASR.For fiscal year 2010, the net profit of

Slovak Telekomdeclinedby 17percentyear-on-yearto 120.9million, SITAreported.

Slovak Telekom Group achieved over-all consolidated revenues totalling 934.3million. According to a company press re-lease, overall revenues fell by 4 percent

year-on-year due to an overall decrease inselected service prices in the telecommu-

nications market as well as the negativeinfluenceof continuing regulation.It saidthe group achieved 393.1 million of earn-ings before interest, tax, depreciation andamortisation (EBITDA), generating oper-atingcashflowof251.7million.

4 BUSINESSMay 9 15, 2011


5/12

Piano

SLOVAKIA is unlikely to pro-duce a globally feared terror-ist, a saintly pope, or a mar-riageable monarch. But still,on occasion, there are peopleandprojectswhichcanstirin-ternational interest. In lateApril we saw the beginning oftwo such endeavours the IceHockey WorldChampionship,and Piano. Enough has beenwritten about hockey, so thiscolumn will focus on the lat-ter of the two - the plan to getweb users to pay for online

content, using a single accessrouteto multiplesites.Before we go any further,

here is a brief warning theauthor of these lines is in theworst imaginable conflict ofinterests. The future of myemployer may depend on thesuccess ofPiano, andI used toshare an office with TomBella, the mastermind be-hind the project. Now thatthats behind us, lets focuson themerits.

The plan to make peoplepay for selected services onthe web has naturally metwith some resistance. Forcingpeople to pay for somethingwhichhas untilnow been free

is no easy task, although fewcanexplainjustwhy it is okayto pay for news at the stand,but not on the web. And yes,all publishers would prefernot to mess with touchy in-ternet audiences and contin-ue to give them unrestrictedaccess. But the numbers justdont add up anymore. Slovakpublications never had iteasy.Around 320,000 copies ofdailies were sold on an aver-age February day. The figurefor the Czech Republic, withjust double the population? 1.1million. And even the already

low numbers keep falling.

Most major newspapers haveseen a 5 to10-percentdecreaseinactual circulationfor a goodnumber of years, although thefinal numbers are somewhat

blurred by marketing activit-ies. Add to that the financialcrisis, which taught compan-ies that huge advertising

budgets for print are no ne-cessity, and publishers are inserious trouble.

Yes, you can always fire

staff. But most media housesalready function pretty effi-ciently. The entire domesticnews department in Sme, theleading opinion paper, has 12people. That is including edit-ors. The business desk hassix.The foreign desk five. Includ-ing its online operation, thenewspaper has somewhereover a hundred people. Fur-ther cuts are possible. But canjournalism of at least somequality survivethem?

No one dares to estimatejust how much money Piano

will bring. But it is certainlywortha try, tobringin atleastsome cash and save at least afewjobs. Muchwilldependon

how internet users view theproject: as an effort to squeezehuge profits out of them; or asa kind request for them to

bear at least some of the costsinvolved in preparing the

value they receive. That willdetermine whether I sharedanoffice with a Slovakversionof Mark Zuckerberg. And

whether I too will one dayhave my 'bin laden' withmoneycomingfrom theweb.

WillPianoencouragewebconsumersto pay? Photo:Sme

Not much reason to smile AT LEAST half of the nationhas low expectations for thecurrent presidentof the coun-try. Very few Slovaks expectPresident Ivan Gaparovi toparticipate in anymeaningfulinternational discourse, solve

a burning political conflict with his penetrating wis-dom or to be a player in con-siderably refining thecountrys political culture.But even those who did not

votefor GaparovitostayinSlovakiasWhiteHousefor asecond five-year term musthave hoped that he would atleast maintain some dignityfor the institution of thepresidency.

Inan incidentaftertheicehockey match that Slovakialost to Russia, Gaparovi didhis best to bury any such ex-pectation. Dont get in my

way here, Gaparovi toldPrime MinisterIveta Radiov

asheelbowedinfrontofanel-evator at Bratislavas hockeystadium, as described byRadiovs adviser, MarianBal,totheSmedaily.

When Radiov spontan-eously objected, Gaparovisreported response was, I amangry because we lost.Gaparovis spokesman wasquick to explain to the mediathatthepresidentmeantitasajoke, adding that it was abso-lutely witty. When asked bySme whether he plans to apo-logise,Gaparovisaidthattheperson whoinventedthe storyshould do so. Then First LadySilvia Gaparoviov ex-plainedthatitwasonlyakind

ofCanadian jokeand that thepresidentsometimesdoes thatto her as well, adding that theatmosphere is different at asportingevent.Perhapssucharationalisation would have atleast given reason to smile ifthe president had elbowed anold-time buddy who couldhavepushedhimback.

No one expects politicianstostopbeing human; itis onlythat they really should workmuch harder on developing

betterjudgmentandmanners.Radiov will face a

much more difficult chal-

lenge than Gaparovis lackof manners when parlia-ment votes by secret balloton the next general prosec-utor. The ConstitutionalCourt ruled on April 20 thatthe rights of general pro-

secutor Dobroslav Trnka

were violated during twoparliamentary votes latelast year when MPs dis-closed how they had voted

by photographing their bal-lotsoropenlydeclaringwhothey had voted for. Thecourt invalidated the res-ultsof votes held on Decem-

ber2andDecember7.

The prime minister, des-pite the efforts of the rulingcoalition to make the forth-coming vote public and re-corded, has declared that it

willagainbe secret, basedonthe courts ruling, and thatMPs will receive no instruc-tions on how to vote. At thesame time she restated thatshe will resign if Trnka re-turns to one of the mostpowerful positions in thecountry. The first time sheissued this warning at leastfour coalition MPs voted

with the opposition Smer

party, pushing Radiov ex-istentially closeto facing theconsequencesofherwords.

The parties of the rulingcoalition have very little inthe way of real guaranteesthat four or five of their MPs

might not be capable oftelling Radiov to get outof the way. Radiov raisedthe stakes very high whenshe hinged her future asprime minister on Trnkaand now there is no way forhertogoback.

Will the governmentfall? is being asked morefrequently these days andeven those who profess tohave some faith in MPs re-sponsibility to those whosent them to parliament the voters are no longergiving their no with re-sounding certainty.

The primeministerfacesthe question: Is it worth

risking the government andthe likely return of RobertFico to power over the posi-tion of general prosecutor?Trnka made it easier for theprime minister to argue vig-orously for his departure

whenhe letoffsteam ina TVinterview early in 2011 andmade pejorative and derog-atory comments about sev-eral elected officials. Trnkatold a parliamentary com-mittee on May 5 that the38-minute interview had

beenmanipulativelyedited.Hiscrude television per-

formancecouldhave been am om en ta ry la pse o f judgement, of course, but

the prime minister haseven more compellingreasons to insist that Trnkadoes not again become gen-eralprosecutor.

Andhopefullythathand-ful ofMPswhomight still betempted to vote for him willunderstand that, whateverthey might see as theirshort-term benefits, such a

vote will take a heavy tollnotonlyon thefaith ofthose

voters who ushered in thegoverning coalition but onthe perception of Slovakpoliticsin general.

5OPINION

QUOTEOFTHEWEEK: Dont get in my way!"

PresidentIvan Gaparovito PrimeMinister Iveta Radiov.He later explainedhis lack ofcourtesyby saying it was a 'joke',and that he was angry after Slovakia had lost to Russia.

SLOVAKWORDOFTHEWEEK

EDITORIAL


BYLUKFILASpecial to the Spectator

May 9 15, 2011


6/12

Penta acquires CzechAB Facility

THECENTRALEuropean investmentgroupPentaInvestmentsacquiredthe Czech company AB Facility,oneof thethree mostimportantsuppliersandintegrators of facilitymanagement on theCzech market,

theinvestment group reportedin a press releasein midDecember.It marked theinvestment groupsentry intothefacilitymanagement market.

ABFacilityrepresents a suitableplatformfor enteringthemarketand buildinga strategicsubjectin thefuture,explained Pentasinvestmentdirector,ZdenkKubt.Weplanto developboththe company anditsportfolioof services.Pentasgoal is to internallyconsolidatethe existingholding,add newacquisitionsandfinallyto consolidatethe facility managementmarket in central Europe.

Compiledby Spectatorstafffrompressreports

Companies andorganisations in

facilitymanagement

SlovakAssociationof FacilityManagement,www.safm.sk

Companies:-ABFacility, www.abfacility.sk- ISSFacilityServices, www.sk.issworld.com-ReiwagFacilityServiceSK,ww.reiwag.sk- Slovclean, www.slovclean.sk

Outsourcing in IT expanded

THEBIGGESTchangein thestructure of ITserviceshasoccurredin outsourcing, theTrend economicweekly

wrotein June 2010,in a commentary abouttherankingof IT andtelecommunicationscompaniesin Slovakia

basedon company resultsfor 2009.The weeklyincluded

in thissegmentKoice-basedT-Systems Slovakia,whichdeals withremotecontrolof IT systems formultinationalclients.It increaseditssalesin 2009 byalmost twothirds,to 40.7million. Thisboostedthe importanceofoutsourcingwithinthe Slovak IT servicessectorto thesamelevelas supportfor existingapplications,eventhough there aremany fewer providersengaged inoutsourcing. T-Systemsaccounted fortwo fifths of therevenuesof theoutsourcing segmentin 2009,whilethetopthree companies(Axasoft andSoitronas well asT-Systems)accountedfor as muchas 70 percent.

Source:Trendweekly

Outsourcing up again

OUTSOURCING has been a fa-miliar term in Slovakia forsome time now. Companies

operating here used it duringthe crisis to reduce costs andsome saw it as key to their sur-vival. However,a recent surveyindicates that the experiencemight not been entirely satis-factory for all companies: somehave decided to reverse theprocess and return to in-sourcing. But experts in thefield see renewed interest inoutsourcing from businesses inSlovakia andnote thatcompan-ies now approach their out-sourcing decision-making in amoresophisticatedway.

The Slovak CEO Survey2011, in which consultancyfirm PwC and Forbesmagazine surveyed 406 top

representatives of companiesoperating in Slovakia betweenJanuary 18 and March 10about their views on the Slov-ak business environment,found that 29 percent of thesurveyed companies had out-sourced certain business pro-cesses or functions over thepast 12 months, while 10.5percent of the companies hadreversed course and began in-sourcing previously out-sourcedwork.

Mat Jurovch, seniorconsultantat PwCin Slovakia,

views the 10.5 percent move-ment to in-sourcing as quitehigh. He sees costs, quality ofservice, lack of abilities andfunds to secure relations withthe outsourcer and, last butnot least, no further need forthe outsourced services, asthe primary reasons behindin-sourcing. He added thatthis relatively high figuremay also indicate that somecompanies were not satisfied

with the quality of servicesthey receivedor theprice theypaidfor theoutsourced work.

Nevertheless,I stillsee atrend to outsource businessprocesses or functions inSlovakia and [see] that com-panies are interested in [do-ing so], said Jurovch, who

based his view on the surveyfindings indicating that over20 percent of the surveyedcompanies plan further out-sourcing while only 6.65 per-

cent plan in-sourcing duringthenext 12 months.

In general, many privatecompanies in Slovakia cur-rently outsource IT services,support services, callcentres, legal services, ac-counting, telemarketing, HRservices and procurement.

Peter Horovk from De-loitte in Slovakia told TheSlovak Spectator that out-sourcing of research and de-

velopment, cloud comput-ing, and outsourcing of data

centres as well as marketing,are among the currenttrends here.

Experts in the field agreedthat outsourcing develop-ments in Slovakia do not dif-fer significantly from othercountries and that, even ifthere is some delay here, thecountrys businesses are gen-erally followingglobaltrends.

The trends in Slovakiamimic global trends and com-panies behave in very stand-

ardised ways, said Jurovch,adding that many of the Slov-ak companies that can benefitfrom outsourcing are daugh-ter companies of large globalfirms for whom outsourcingis an established practice.

Horovk agreed thatthere is some delay in Slovaktrends, ascribing it generallyto the scope and performanceof Slovakias economy. But he

believes another significantfactor is a lower awarenessabout outsourcing among

Slovak-based companies:about the benefits it can bringand when it is suitable to pur-sue outsourcing.

Horovk added that inSlovakia outsourcing is per-ceived primarily as finding acheaper alternative to intern-al supply of particular ser-

vices, noting that while out-sourcing of accounting, someIT services or legal services iscommon in Slovakia, neweropportunities in outsourcinghavenot beenfully tapped.

He noted that there areseveral reasons forthisbutbe-lieves the most significant to

be a lower level of competi-tion between companies in

some economic sectors incomparison to the USA andwestern Europe and thereforeless pressure to increase thequality of services or reduceprices, the main benefits ofoutsourcing. Horovk alsopointed out that the relativelysmall Slovak market meansthere is less demand to drawin potential suppliers of cer-tain businessfunctions.

SeeOUTpg8

BY JANALIPTKOVSpectator staff

IToutsourcing isrelatively commonin Slovakia. Photo:Reuters

Telecoms companies want to differentiate themselves

TELECOMMUNICATIONSis onesectorwhich has been particularly affectedby the movement towards out-

sourcing. As customers seek increas-ingly tailored services, outsourcingcanhelptelecomoperatorstodifferen-tiatethemselvesfromcompetitors.

The Slovak Spectator spoke toGottfried Madl, who is the AccountDirector in Nokia Siemens Networks(NSN)Slovakia,about thelatest trendsandchallengesin outsourcinginform-ation and telecommunications (ICT)servicesinSlovakia.

The Slovak Spectator (TSS): What do

you understand by the term out-sourcing?GottfriedMadl(GM): Outsourcing

is a very commonly used term andeverybody understands somethingdifferent by it. Always when we start

talking to a customer about out-

sourcing or managed services we startwith what he understands by theseterms,what hewants toachieve,whatare his intentions and then we agreeonthetermsandsticktothem.

Weactuallyunderstandtwo terms one is managed services (MS), andthe other is outsourcing. Under man-agedserviceswemeanthatwearetak-ing over service responsibility fromour customer and we manage thoseservicesonbehalfofourcustomersbut

we do not transfer headcount. So forexample, we take operation of thenetworkfrom ourcustomer,butwe doit with our resources; we do not takeanybody from that organisation intoourorganisation.

We use the term outsourcingwhen we manage a clients network

or other part of his business, but alsotransfer headcount into our organ-isation.

Here I would like to stress that nooutsourcing, no managed-servicesdeal is like any other. Each time it is a

customer-tailored solution, which

needs a lot of engagement from bothsides and a lot of time before finallyconcluding the project in terms of de-finingitanddefiningthepartnership.

TSS: What arethetrends intermsofoutsourcing ICT services in Slov-akia? Could you compare Slovakia

withtherestoftheworld?GM:Whenitcomes toservicesand

tocomparewhatIseehereandallmycolleagues sharethis opinionwith me Slovakia is pretty much in the samestate as the rest of Europe. All of thosecountries and our customers in Slov-akia face the same challenges. Theyare experiencing pressure basicallyfrom four directions the market,technology pressure, how they oper-ateandfinancialperformance.

With regards to the market, it isobviousthatitis becomingmorecom-petitive.Our customers, as well as thecustomersof ourcustomers,are chan-ging in that they do not accept massservices any more and want to have

individual services tailored for them

only.Intermsoftechnology,weareonthe verge of changing the currenttechnology for a new one. In opera-tions, we see a lot of transformationfrom a more traditional organisationinto more customer-focused opera-tions. As for financial performance,thiscomeswithmarketpressure.

These are the pressures that ourcustomers have to live with. To sumup,allofthemwanttogrowandhaveto reduce their costs at the sametime. This is the framework within

whichweoperate.

TSS: Apart from cost reduction, what other benefits can ICT out-sourcingbringtoacompany?

GM: This is a very good question because everybody, when thinking

about outsourcing, thinks about costreduction. Im convinced that itsmuch more. Outsourcing of non-crit-icalservicesto an outsourcingpartnercan bring benefits to the customers inmany areas. The first is a re-focusing

on the customer by outsourcing ser-

vices where it makes no difference tothe end customer who performs theseservices; the second is to minimiserisk;andthethirdisto implementandlaunchnewtechnologies.

Returning to the first benefit, wesee that our customers have to focusmore and more on their subscribers.

Actually, outsourcing can help themhere because once telecom compan-ies have decided what their core

business is and what differentiatesthem from the competition they areready to talk about outsourcing. Wecan help in areas which are essentialin orderto provide theirservices, butdontmakeany differencefor them.

The second one is managingcomplexity. New technologies arecoming: a trend all over Europe is

that fixed and mobile services areconverging for those where this isapplicable, and this generatescomplexity.

SeeICTpg8

BYJANALIPTKOVSpectatorstaff

6

BANKING & LEASING

Next issue:BUSINESS FOCUS

OUTSOURCING

Businesses in

Slovakia followglobal patterns

May 9 15, 2011

Theboomin data centresaccelerates outsourcing

Discerningtrendsin ICT out-sourcing in Slovakiais difficult


7/12

Experts see moreICT outsourcing

IT IS difficult to clearly dis-cern current trends in out-sourcing in the informationand communications techno-

logy (ICT) sector since insome areas Slovakia lags be-hind other countries of the

world but in others the coun-tryis atthe forefront.

The reality is that for thelast five years only a very lownumber of really big out-sourcing contracts wereclinched, Gustv Budinsk,the executive manager of theIT Association of Slovakia(ITAS), told The Slovak Spec-tator, adding that the crisis

waspartlybehindthis butthematurity of the ICT market

wasa moresignificant factor.ICT providers in Slovakia

currently offer all the servicesinvolved in IT infrastructure

outsourcing or IT applicationoutsourcing, Budinsk said,noting that the only excep-tionhere is theoutsourcingof

business processes a step which is happening almostexclusively among foreignprojectsin Slovakia.

Budinsk said that, so far,simpler kinds outsourcing,such as outsourcing IT infra-structure or IT applications,hasprevailedhere while otherparts of the world have amuch broader definition forthe term outsourcing.Budinsk said this is some-

what paradoxical in that atleast two companies in Slov-akia use so-called complex

outsourcingthat is commonlyused in other parts of theworld but you will find out-

sourcing with a similar scopein neighbouring countriesonlywith difficulty.

Budinsk thinks out-

sourcingis a toolthatcan helplocal companies re-startafterthe crisis and hopes to seemore outsourcing in Slovakiain thenear future. He particu-larly views the financial andtelecommunication sectorsas areas where outsourcingcangrowhere andadded thathis association believes that

within some time somebodywill be brave enough to alsoenter outsourcing of busi-ness processes.

ITAS views cloud comput-ing as a welcome extension ofoutsourcing rather than as analternative to outsourcing,Budinsk said, adding that itprovides thus-far unseen ca-

pacity opportunities for busi-nesses andotherclients.Budinsk does not view

reduction of costs as the onlypositive outcome of out-sourcing, stating that whenoutsourcing works well,apart from a lower price, it

brings a more flexible rela-tionship between costs andscope of service, meaningthat costs are not fixed andcan flexibly change withdemandandthatcostsdo notgrow linearly when service

volume increases.Wealso should notforget

one of the most importantfeatures of outsourcing andthat is the reduction of risk,

Budinskadded.

ByJanaLiptkov

Demand for facilitymanagement grows

GOOD facility managementis seen as a vital service thatcan make a significant con-tributionto a companysper-formance. Its proper execu-tion allows a company to fo-cusbetteronitscorebusiness

and improve its competit-iveness without worryingabout ancillary matters con-cerningitsfacilities.

Theindisputablebenefitoffacility management is its syn-ergic effect in the area of sup-p ort activi tie s, Vi er aSomorov from the Faculty ofCivil Engineering of the SlovakUniversity of Technology inBratislava, and also the presid-entof the Slovak AssociationofFacility Management, told TheSlovak Spectator. Another be-nefit of use of the facility man-agementmethodin a companyis the opportunityfor topman-agement to focus on their corebusiness while support activit-

ies are managed by the facilitymanagementdepartment.Facility management is

more rootedin thecountriesofwestern Europe than in Slov-akia; even the Czech Republicmade stridesin thisfieldmuchearlier than Slovakia. Never-theless, Slovakia is now catch-ingupwithwesterntrends.

The delay can be seen insome way also by the [later]launch of an organisation clus-tering facility managementcompanies, Andrea Szabov,property manager at Cushman& Wakefield in Slovakia and amember of the Slovak Associ-ation of Facility Management,told The Slovak Spectator,

adding that while the Czechbranch of the InternationalFacility Management Associ-ation, IFMA CZ,was launchedin 1999 and became an IFMAmember in 2000, the first at-tempt to launch a Slovakbranch of theIFMAcame onlyin2007.However,thatfirstor-ganisation was not a successandlaterdisappeared.In2009,the Slovak Association of Fa-cility Management was foun-ded and became a member ofEuro FM (the European Facil-ity Management Network) initsfirstyear.

International companiesthat provide facility manage-mentserviceskeeparrivingin

Slovakia and bring along newtrendsand extendthe scope ofservices available to propertyowners. This is why Slovakiacan take good systems ap-proachesfromabroadand add

aspectsadaptedtotheSlovakmarket,Szabov said,notingthatmoreandmorecompan-ies are currently deciding tooutsource their facilitymanagement functions sotheycanfocusbetterontheircorebusiness.

Somorov added thatmanagers of companies inSlovakia are realising the be-nefits thatcan comefrom im-plementation of professionalfacilitymanagement.She saidthat several years ago facilitymanagement was only usedprimarily for the in-sourcedmanagement of buildings;butthat now, with thearrivalof foreign firms, outsourcing

of selected facility services isalso beginning to be imple-mentedinSlovakia.

Outsourcing of facilitysup-port services may bring com-panies benefits such as reduc-tion and optimisation of costs,Somorov and Szabov said.These can include savings onsalarieswhen a buildingownerdoes not need to employ spe-cialised workers, only pays foractual work time and is not re-quired to deal with matterssuchas holidays, sickleaveandother benefitsthat arerequiredforinternalworkers.

Another potential benefit,Somorov added, is better-quality management of sup-

port services as the externalcompany providing out-sourced services has a pool ofqualified and knowledgeable

workers and the outsourcingcontract gives the client theopportunity to check the per-formed activitiesand evaluatethem according to agreed-uponindicators.

Moreover, she said, it ispossiblefor a companyto saveon investment costsas it doesnot need to use its capital forservices that are outsourced,for example for IT equipmentor car fleets, when the providers of these services bearthat responsibility. The ex-pert also noted that a com-

pany can better track the de-tails of the services based oninvoicesand analysethe costsofindividualactivities.

Outsourcing canalso bring better coverage for damages

that a company suffers to itsproperty. Theliabilityof anin-ternal employee is limited bylawbutthe providerof facilitymanagement services is fullyresponsible for damages,Somorov said.She added thatoutsourcing of ancillary sup-port activities can result infreeing property space whichanownercouldchoosetorent.

But Somorov pointed outthat a company needs to beaware that it takes some timeuntil a provider of facilitymanagement services canfully perform its duties andthat a contractual agreementis morecomplicatedwhenit issupplemented by a service

level agreement which must be precisely formulated andagreedbytheparties.

The benefits of out-sourcing the management ofsupport activities prevail overthe disadvantages and thusmanagementof support activ-itiesintheformofoutsourcingis more and more sought bycompanies,saidSomorov.

Somorov noted that herassociation often hears opin-ions in Slovakia that out-sourcing of support servicesfailed to bring the desired ef-fects but believes the problemstems not from outsourcingitself but in less-than-ad-equate preparation by an or-

ganisation for implementa-tionofoutsourcing.The basic mistake of an

organisationis an effort to out-source support activities asquickly as possible withoutproper preparation foroutsourcing, said Somorov.[In these cases] the projectfailsto secure outsourcing thatfirmly establishes the qualityof provided services and par-ticularlytheir supervision.

Definitions of terms andstandards for facility man-agement were developed bythe European Committee forStandardisation in 2006. TheSlovak Standards Institute es-tablished these as national

standards and issued anidentical text translation un-derthetitleSTNEN15221Facil-ityManagement. Thenationalstandards have been in forcesince2007.

The standard in itssecond part precisely informs what such an agreementshould contain, includingmeasurement and supervi-sionof thequalityof providedservices, said Somorov. Itis a mistake when an organ-isation that wants to out-source these activities doesnotapply thisstandard.

Somorov sees anotherproblem in tenders in whichthe lowest offered price is ac-cepted whilethe qualityof theprovided services is not fullyconsidered.

Facilitymanagementcourses

TheFacultyof Civil Engin-eering of Slovak University ofTechnology (STU) in Bratis-lavahasrespondedtothe needto train more facility man-agement experts by offeringpost-graduate courses on fa-cilitymanagement.

Somorov explained thather faculty was encounteringrequests from providers of fa-cility management services tosupplyfacility managerswhohad mastered all the requiredknowledgeso thatafter takinga position and gaining prac-ticalexperiencethey would beableto workas professionalfa-cilitymanagers.

The Faculty of Civil Engin-eering was already teaching,in other master's degree studyprogrammes, subjects closelyrelated to facility manage-ment, so to offer a completeeducation in facility man-agementit wasonly necessaryto integrate these disciplinesunder a single roof and thatthis is now happening inphases. Somorov said thefirst step was to provide stu-dents with the opportunity togain thorough knowledge offacility management via post-graduatestudies.

STU's Faculty of Civil En-gineering was the first inSlovakia to offer a post-gradu-

ate study programme in Facil-ity Management, during the2009-2010 academic year, andthis programme has contin-ued in the current academic

year, Somorov stated, addingthat it is divided into five sec-tions with an initial sectioncalled Facility Management,followed by Energy Manage-ment, Quality ManagementSystems, Maintenance ofBuildings and Management ofHumanResources.

The possibility to studyfacility managementhas beenmet with exceptionalinterest, said Somorov,adding that 80 students haveattended the programme.

Due to the high interest weare preparing workshops, within the post-graduatestudies, as a continuation forgraduatesin which theirprob-lemsinpraxiscanbesolved.

BY JANALIPTKOVSpectator staff

Facilitymanagementismorethanjust cleaning. Photo:Sme

7BUSINESS FOCUS

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Illuminateand enlightenTHEBOOM in datacentresis helping to accelerateout-

sourcingservices. Thisistheopinionof experts activein thedata-centresector,

whoadd thatbetterknow-ledge andmore informationisthe keyto higherusage oftheir services.

[Itis necessary] forpeople atleastto know thatsomethinglike thisexists,Michal Majerk,the directorgeneral ofCNC,saidin June,asquoted bythe Trend

weekly.He addedthatit ishopelessto expect companymanagersto getinformationaboutdata centres andtheservicesthey providefromtheirIT expertsbecausesuchpeopleare afraid theymight

losejobs, eventhoughthisneednot betrue.MiroslavStreansk of

Swan saidhebelievesthatitis necessaryto explain tocompany managersthat aninternalIT solution coststhem thesameas out-sourcingit, butwhen theyoptforthelatter they getsignificantly higher value.

VladimrDa, projectmanagerat Datahouse,wasquoted as sayinghe regardstheboomin data centres asgoodpromotion. According

tohim,thisis whyhewel-comes competition: Clients

look atdatacentresin a dif-ferent waywhen there isonlyone [comparedto] whentheyare moredata centres.Hebelievesthat companymanagerstrust outsourcingmore when they seethatthis

businessmodel is thriving.DuanMesr,executive

officerof Dial,highlightedthat itis necessaryas part ofthemessageto communicateto clients howdata centresareprotected. Accordingtohim,clientsalreadyknowthat data-centre operatorsareable to offer internetconnectivity, stable temper-atureandhumidity. Butit isnecessaryto convincethem

thatoperators arealso abletoprovide physical security.Itis necessaryto help

clients overcome concernsthat theirdatamay bestolenor abused,said Mesr.

Hepointedto a rangeofsolutionsfor physicalsecur-ityin data centres:fromfin-gerprintscannersuponentry, to camera systems andmovementdetectors, tolockablecagesfor servers.


frompressreports

OUT: Agreeing on terms is essentialContinuedfrompg6

So even though a companymay be interested in out-sourcing some processes orfunctions, it may be unable tofindasuitableexternalsupplier.

Horovk pointed out aparadox with regards to out-sourcing: when consideringoutsourcing, companies arevery concerned about data

leaks and the potential loss oftheirknow-how.But Horovksaid global statistics show thatinternal employeesare moreofa threat in terms of leaks andfraudulent behaviour thanoutsideserviceproviders.

Jurovch believes thatwatching costs and reducingthem when possible remainthe strongest motivation forcompaniestooutsource.

Anotherfactorthat speaksto the benefit of outsourcing isthe structure of costs, said

Jurovch,addingthatcompan-iesaresometimesbetterabletopredict and manage costs fromoutsourcedservices.

Another factor that leads acompany to outsource in-cludestheopportunitytofocusbetter on its core business

whilestillhavingaccess totherequired pool of specialists: acompanydoesnotneedtohavespecialists on staff for func-tions outside its core businessas this becomes the responsib-ility of the external supplier,Jurovchsaid.

Horovk said that out-sourcing should not always beperceived as only finding acheaper alternative for a par-ticular service in comparisonto internal sourcing becauseinsomecasesoutsourcingmaybe

the best solution in terms ofthe relationshipbetween priceandquality,evenif itis notne-cessarilythecheapest.

Especially during thecrisiscompaniesopted for out-sourcing in orderto save,saidHorovk, who thinks thecrisis forced companies to get

back to earth and start think-ing about their business pro-cessesinamorerationalway.

The trend in terms of theinterest of companies in out-sourcing is sinusoidal, saidHorovk specifying thatFive to six years ago there was a boom in outsourcingwhen many companies wereenthusiastically hoping for

greaterflexibilityintheircore business, [seeking] lowercosts and getting rid of sup-port processes. Then it wentdown a bit because the com-paniesrealisedthatthe wholeprocess of outsourcing is noteasy and that it requiresagreeingon a numberof tech-nical details, etc. The crisishas brought another way ascompanieswantedtofocusontheircorebusiness.

Horovk sees an upwardtrend now, but said the ap-proach of many companies is

more sophisticated and wellthought-out.

Sharedservice centres

Shared service centres(SSCs) can be viewed as a kind

of outsourcing, according toJurovch.This means that a com-

pany does not place an orderwith an external supplier for acertain service but creates anentity,forexampleat a region-al level, which then providesthis service, Jurovch said,adding that the service isprovided on the basis of a so-called service level agreement

between the shared servicecentreand thecompanyorder-ing the service within thegroupofcompanies.Heusedasan example an insurancecompany with branchesacross Europe, which maycreate a SSC to provide finan-

cial and accounting servicesto all its branches. This couldalso be desirable when out-sourcing to an external com-pany may be unacceptabledue to security risks, or whena company does not want tolose absolute control over aprocessor service a potentialprobleminoutsourcing.

Horovk confirmed thatthere is a trend towards creat-ing SSCs, adding that Slovakiais already home to suchcentres, which have beenmoved here from western

Europe by companies such asJohnson Controls, Dell, IBM,KraftFoodsandLenovo.

While companies do notgenerally outsource key pro-c esses and fun ctions,Jurovch thinks it is possible

tomovesomekeyprocessesin-to shared service centres, butthis process is much more dif-ficult and demanding thanoutsourcing of supportservices and that this differsfrom company to company.Jurovch regards the trendtoward SSCs as having poten-tial and expects that more will

bedevelopedinSlovakia.Expertsstressthatprepar-

ing a solid, properly-wordedservice level agreement withclearly measurable criteria isthe basic fundamental for as-suring quality outsourcedservices.

Milan Gajdo, manager ofperformance and technology

at KPMG in Slovakia, statedthat companies should notunderestimatethe importanceof carefully preparing thecontractscontents.

If left only to lawyers thecontractmightbeperfectfromthe legal point of view but acatastrophe from the long-term operational point of

view, Gajdo told The SlovakSpectator.[A poor]contractisamong the top reasons inSlovakia and central and east-ern Europe for overall out-sourcingfailure.

ICT: Making a strategic matrixContinuedfrompg 6

Internally in an organisa-tion you need to manage frommobile to fixed, from fixed tomobile,you needto createnewservices, and actually how wecan contribute here with out-sourcing is that we can lendour customers the benefit ofour worldwide experience,

which we have generatedfrom our scale, i.e. about 300management services con-tracts and outsourcing con-tracts around the world, and14,000 people transferred

worldwide from our custom-ersinto ourorganisation.

And then there is anotherpoint introducing new tech-nologies. I can give an ex-ample building of LTE, alsosometimes called the fourthgeneration in mobile com-munication. To build an LTEnetwork, there is no differ-ence to your end customer whether you do it on yourown or you let another com-pany build it for you. This issomething which can be out-sourced viathekindof service we call build, operate andtransfer. So we provide theservice to build a completenetwork, we operate it for acertain time, and transfer itbackto thecustomer.

TSS: In which sectors isNokia Siemens NetworksSlovakia active within out-sourcing and what servicesdoyou provide?

GM: Our main clients op-erate in the fixed and mobilenetworks, but we also serveutilities, for example. If youtake a look at the lifecycle ofan operators business thisconsists of designing, build-ing, operating, maintainingand optimising the networkforfixed and mobile networks.

We address all of these areas.Clients can get the most bene-fit from it if you address allfiveareas, something whichiscalled end-to-end out-sourcing. However, we haveprojects around the world

where we address one of thesefiveareas.

TSS: Where do you see thefuture of outsourcing of ICTservices? Might it be that inthefuturetelecomoperators

willfocus onlyon marketingand sales and the whole op-eration and development oftheir networks will be out-sourced?

GM: Its hard to say nowhow far telecom companies

will go. We are currently at astage where I would say everyoperator has to think about

what his core competence isand where it can differentiateitself from the competition.Each company has to make astrategic matrix, which says:

thisI needtomakeonmy own because this makes a differ-ence; and this doesnt make adifference and I can give itaway. Once the company hasthat, it can take the second

step and start thinking aboutoutsourcing.

At the moment I dont seethat the future operation ofnetworks will stop making anyfurther difference: I believethere will be still some partsoperatedby ourcustomers.ButI could be proved wrong. Nev-ertheless, I truly believe that

we will see a lot of movementin the next one or two years inareas where operators espe-cially will make up theirminds, and will make de-cisions on what is strategic tothem, where they can make adifference in the competitionand which parts they can out-

source without harming theircompetitive advantage. With regards to the space

for future growth, NokiaSiemens Networks is continu-ously analysing key perform-ance indicators (KPIs) like edu-cation level, cost of employees,inflation, political stability andother factors, for all Europeancountries. And while doingthese analyses for a lot of coun-tries inside as well as outsideEurope, we found that Slovakiais a quite interesting countryfor providing services fromSlovakia to other countries, be-cause for all those major KPIs itlooks reallygood. Sowe arecur-rently analysing whether to es-

tablish in Slovakia somethingmore in terms of deliveringservices to othercountries.

To read the whole interview,please go to www.spectator.sk

8 BUSINESS FOCUSMay 9 15, 2011

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9/12

TAX: Controversyabates to a simmer

Continuedfrompg1

The deadlinefor submit-ting bids toleasea building

wherethe taxofficescould

eventuallymove hasbeenextendedfrom May10 totheendof themonth. Thecom-mission willevaluatethese

bidsas well.Itis importantthatthe

commissionmakes the rightdecisionso that wecan ad-

vancea littlebit, said IgorKrn,who was charged

withleadingthe Tax Direct-oratefollowingthe resigna-tion ofMikulk, asquoted

bytheSITA newswire.Miklohas hintedthat

the commissionmight ulti-matelyconclude thatthe taxofficeswillnotmoveinto asharedbuilding.

Theoriginalleasingcontroversy

The original case,whichprompted significantten-sionwithin the ruling coali-tionlast month, was broughttothe mediasattentionbyoppositionleader RobertFicoonApril11, whenhe presen-tedtheTax Directoratesde-cisionto rentofficespaceinKoicefromNitraInvest,acompany ownedby a region-alSDKofficial, asa tale ofpartycronyism.He allegedthat some ofthe moneyfromthedealwould endup intheSDKs accounts,though hepresented no evidence to

backup thisclaim. Mikulk,who astax chief hadap-provedthe deal,immediatelyresponded thatthe contract

wascompletelyin linewithapplicablelaws andwouldsave thestatemoney. On

April15, NitraInvestan-nounced that itwas with-drawing fromthe contract,stating that itdid notwantanyfurther suspicionsto af-fect itsname.

PrimeMinister IvetaRadiovand Miklo,bothmembers of theSDK,laterclashedhead-to-headoverthefate ofMikulk,withRadiovcallingonMikulkto resignand

Miklo,who hadappointedhim, sayinghesaw noreas-onfor the taxchiefto go.Thestand-off raised con-cernsamongthe other rul-ingcoalition parties andpromptedspeculationabouta possiblepower strugglewithin theSDK.On April19 SDKleadersappeared toagreethatSlovakias public-financewatchdog,theSu-premeAuditOffice (NK),woulddecidehis fate viaanauditof thedeal.

However, onApril20,Radiovwaslate arrivingata regular session ofcabin-etand confirmedthathertardinesswas related to

Mikulks continuedpres-ence.Askedif shehadthreatenedto resign overtheaffair,she stated: IhaveunambiguouslysaidthatI willnotlead a gov-

ernment over whichsuchashadeis hanging.Mikulkresigned thesame day.

Theanalysis

Theruling coalitionori-ginally saidthat politicalre-sponsibility for theofficeleasing case laywiththeSDK.

However, in lateApril,theother coalitionpartiesasked tosee theanalysisthatthe TaxDirectorate hadelaboratedand whichtheSDK hadusedin itsde-fenceof therentalplan.Theanalysisadvocatesthe op-tion ofmoving into a sharedbuilding,as opposed to in-vestingin thereconstruc-tionof itsexistingfacilities.

Kollr saidthat, amongotherthings,the projected

5.5-million costof recon-structionof the existingbuildingswas notverifiable,andadded thatthe analysis

was elaborated foronlya5-yearperiod.Kollr arguedthatthe costsof reconstruc-tion shouldnothavebeenincludedas a cost item inthe

yearin whichit wasincurredbutshouldhave beenre-cal-culatedovera periodof 20

years,witha 5-percentan-nualamortisation rate,theSmedaily reported.

Mikulk rehabilitated?

Miklohas meanwhilepickedMikulk toserveas

anadviseron hisprojecttounifytax collection, butneither thedetailsof hisstatusat theministrynorhiseventualpay areyet known,Smereported.

PoliticalanalystJurajMaruiak interpretedMiklomove asa messagetoRadiovthat he willcon-tinueto doas hepleases.

TheappointmentofMikulkto thepostof ad-viser is a negative gesturetowards Radiov,saidMaruiak,as quotedby theTASRnewswire.The fin-anceministeris lettingRadiov knowby thismove that hedoesntagree

withthe stancethatshetook inthe case oftheKoicerentaldeal.

The selectionof advisersisfullywithinthe compet-enceof individualministers,Radiovsaid aftera Coali-tion Council session onMay2.Mikulkis expected toserve asan adviser onUNITAS, a 22-million taxunificationproject beingun-dertaken byIBM.On May4SmereportedthattheFin-ance Ministry hasnotdis-closed a listof sub-contract-orsto theproject.Slovakme-diaspeculatedthat thefirmCSC Computer Sciences,

whereMikulkhasin the

past servedas anauthorisedrepresentative, was amongthem.Miklosaidthatit isthebusiness ofthe mainsupplier to choosesub-con-tractors, Sme wrote.

9NEWS / BUSINESS

RAIL: Private competitor gears upContinuedfrompg4

The railway operator is alsoreducing its labour force. Intotal it plans to lay off 621 em-ployeesoutofatotallabourforceof5,000overthreeyears,accord-

ingtotherevitalisationplan.The delayed adoption ofthe plan and the lower-than-planned reduction in servicemeans that ZSSK has not fullyobserved its scheme to cutstaff. Pavel Kravec, ZSSKs dir-ector general, told the Pravdadailythat thecompanyis nowcancelling 322 positions, ofwhich 170 were already va-cant. Of the remainder, 80people will get scheduled orearly retirementand 70peoplewilllosetheirjobs.

Kravec added that inDecember ZSSK will reducepassenger services by an addi-tional 0.5 million kilometresannually, and by another 0.3

million kilometres in March2012. He didnot specifywhichroutes would be affected, butpart of the cuts will coincidewiththeintroductionofanewroute by private railway oper-ator RegioJet in southernSlovakiafromMarch2012.

Harmonisingpublic transport

In Slovakia mass publictransport is provided by thestate-owned ZSSK and by re-gional bus companies. The lat-ter have been partly privatised,with the National Property

Fund remaining the part-own-

er,but the governmentof IvetaRadiov is pondering privat-isationoftheremainingstakes.The state subsidises mass pub-lic transport either by rail orroad. To get a proper picture ofhow effectively this support either from the state budget orfrom the budgets of regional

governmentsisused,theMin-istry of Transport, Construc-tionandRegionalDevelopmenthas ordered an analysis fromthe ilina-based Transport Re-search Institute (VD). This isintendedtogiveapictureaboutpassenger flows on both trainsandbuses.

Originally, VD was sup-posedtodelivertheanalysisbythe end of April. But after buscompanies and regional gov-ernments refused to give VDthe necessary information,thedeadlinewasextended.

VD director ubomrPalk, in comments to The

Slovak Spectator, said his im-pression of the current state ofpublic mass transport is thatinstead of coordinated and in-tegrated operation of railwayandbus transport systems,thetwooperateincompetition.He based his observations onVDs initial findings. His in-

stitute hasalreadymapped outrailwaytransportflowsbuthashad problems doing the sameforbustransport.

SADcompanies[operatorsof public scheduled bus trans-port],as privatecompanies, donot want to provide us withdata about their passengernumbers, and self-governingregions claim that the con-tracts they have signed withSAD companies prevent themfrom providing information tothirdparties,saidPalk.

VD has obtained dataabout bus transport only inilina Region. Based on these,

only 22 percent of passengerrail capacity in the region (be-forethismonthschanges)wasused; in the case of bus trans-portthefigurewas33percent.

Even though nobody ex-pects these to be used at 100

percent, these are still lownumbers, said Palk, whosaidhewelcomeseffortstobet-ter coordinate bus and trainlines in order to prevent over-lap and for them to act in a co-ordinated way, rather than asrivals. He said he would alsowelcome it if more passengersmoved from cars onto trainsand buses and thus reducedroadtraffic.

Private railoperator

In April, RegioJet, a subsi-diary of the Czech firm StudentAgency, showed Slovak travel-lerswhattheycanexpectwhenit officially starts operation on

the Bratislava-Komrno routenextMarch.Regiojet will operate the

route with the help of a statesub

slovak spectator 1718

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