The Privatisation Agency of Kosovo (PAK), established as the successor to the Kosovo Trust Agency, is an independent public body responsible for overseeing the long-term privatisation of multiple public assets. The powers of the PAK are vested with its Board of Directors, comprised of three international and five Kosovar directors, and chaired by Dino Asanaj. Mr Asanaj has been involved in startup ventures in Kosovo, where he was one of the first investors of US capital in companies such as IPKO and other telecommunications ventures. He has also headed, as Managing Director, and invested in the International Village housing development in Prishtina.
Since its first board meeting in August 2008, the PAK has prepared the privatisation of Socially Owned Enterprises (SOEs). In 2010, over 590 business enterprises in Kosovo were identified as potentially being Socially Owned Enterprises (SOEs), employing between them an estimated 20,000 people and operating in a variety of sectors including metal processing, plastics, paper, hotels, mining, agro-industrial, agriculture, forestry, building materials, construction, textiles, wineries and vineyards, brewing, tobacco, retail and wholesale trade.
Most of Kosovo’s industrial assets, prime agricultural land, forests, urban commercial land and commercial properties either were until recently or are still owned by SOEs. The privatisation of these assets – and the attraction of local, regional-diaspora and international investors to the privatisation programme – is expected to have a profound and positive impact on Kosovo’s economy and on job creation.
CASE STUDY: PTK
Started in 1965 as Kosovo’s autonomous postal and telephone service, Kosovo Post and Telecom (PTK) was transformed into a joint stock company in June 2005, with Kosovo’s government as its biggest shareholder. Today, PTK has three divisions which respectively handle postal services, fixed-line telecommunications and mobile telecommunications.
PTK has experienced a dramatic turnaround over the past few years, boosting its customer numbers and profits significantly. In fact, PTK is now ranked the most profitable company in Kosovo. CEO Dr Shyqyri Haxha, who has led the company during the successful transformation, explains: ‘We have cut prices and increased our number of employees. We have been able to boost both profits and customer totals by increasing our efficiency, responsibility and discipline. We have also launched a number of new products. In general, we have managed to respond more quickly and effectively to our customers and basically do our job better on a daily basis.’
In the late 1990s Dr Haxha fled Kosovo for the UK, where he and his wife found asylum and raised their family. ‘I always knew I would return to Kosovo, to make my contribution to the country,’ he says. Thus in September 2008, seven months after the country had declared its independence, he applied for the job at PTK. ‘I thought it was a good opportunity,’ he recalls, ‘but was also aware there were going to be challenges. Despite the difficulties and challenges I’ve faced, I feel so proud that I’ve managed to have some positive results.’
PTK’s vision is ‘To be the driving force in creating prosperity for the nation and enriching the lives of Kosovars everywhere.’ The company is now in the midst of a privatisation process that is attracting serious foreign investors. The new partner will enhance the competitive advantage even further and will lead the company in the new growth niches. The company will be a foundation of growth for the entire nation.
Kosovo has the youngest population in Europe – a population that is well-trained, cheap and working under a favourable tax regime.
Dr Haxha recalls that when he started with PTK, the company was in a very bad state. He has eradicated stolen data traffic, which was a massive problem before he started working with the company. By increasing subscribers by 50 per cent, increasing traffic and launching new products, the company has secured over 71 per cent of the overall market and 30 per cent of the broadband market. It currently boasts some of the cheapest mobile tariffs in the world, an important factor for a country with a large diaspora.
Dr Haxha will oversee PTK’s privatisation process, which should be complete by the end of the year. (Its postal division will remain publicly owned.) So, is Kosovo becoming a good place to do business? ‘Yes,’ Dr Haxha replies enthusiastically. ‘Although there are many challenges, there are opportunities. This is a hungry market and a great place to invest.’
PAK Success Stories
StoneCastle vineyards and winery, situated in Rahovec, is the largest winery in Kosovo and one of the largest in the region. StoneCastle has 260 regular employees and produces about 12 million litres of wine each year, most of which is exported. StoneCastle is available in the UK, Germany, Belgium, Switzerland, Austria and various other European countries. www.stonecastlewine.com
Peja Brewery began production in 1971 and was publicly owned until 2006. Since privatisation, over €25 million has been invested in the company. Peja Beer currently has over 600 employees, and its production capacity has increased from 300,000 hectolitres to 900,000 hectolitres of beer per year.
A PAK Project in the Pipeline
Brezovica Ski Resort
Brezovica is a famous ski resort in the northwest part of the Sharr Mountains. Although reaching a height of 2,500 metres above sea level, the resort is only 60 km from Prishtina and Skopje airports and 400 km from Belgrade. With its stunning alpine landscapes, Brezovica is already similar to other European skiing resorts, but it will really be able to flourish following the privatisation process. Brezovica’s ski terrain, comprising 16 kilometres of ski slopes, is connected by five chair lifts and five other ski lifts. The resort is known for its fast and challenging skiing, and includes slopes suitable for slalom and giant slalom racing; indeed, a number of national and international competitions have been held there.
The combination of a mild valley climate in the lower parts and a true alpine climate in the higher regions make this part of the country eminently suitable for the development of year-round tourism. The summer months reveal forests, beautiful meadows and endless pastures full of mountain flowers, herbs and rare game, with a dense network of rivers and rich wells gushing with cold, clear water. Tourists can enjoy organised walking, recreation activities, excursions, hunting and fishing.
Albanians and Serbs alike enjoy skiing in Brezovica. What’s more, it now looks as though privatisation and concession may finally go ahead. At the Brezovica Master Plan presentation on 31 January 2011, the Prime Minister of Kosovo, Hashim Thaçi, said: ‘This is an important document for Brezovica and Kosovo. The government has worked hard to create a friendly and safe environment for foreign investment. Brezovica is being presented by the world’s most powerful media as a destination for tourism.’ During the detailed presentation of the feasibility plan financed by the EU, its author, Victor Manuel Costa Cabrera, explained that the biggest single investment required will be €25 million for new ski lifts, while €60 million will be needed for the design of mountain building capacities.
A privatised Brezovica will have an impact on the economic development of Kosovo, a country that offers the opportunity for tourism 365 days a year. According to Mr Asanaj, the renovated centre in Brezovica will create hundreds of jobs. And there’s always the possibility that it will spark ethnic reconciliation and sustainable environmental development. ‘The management and the community there are more and more supportive of the privatisation of Brezovica,’ he said. ‘They see it as the only solution for the development of tourism.’