Finance Ministry Proposes Minority Partner for CYTA


In a move that’s bound to upset government trade unions and opposition parties, Finance Minister Haris Georgiades said that measures will be taken to find a minority partner in CYTA.

Privatisation is part of the government’s reform drive and although initial measures were rejected, the efforts have no expiration date, he told the state broadcaster. The proposal would have to go through the House of Representatives first.

CYTA needs modern, effective management – not in terms of the public sector, but in terms of the competitive private sector, he added. One of the advantages of the proposal would be that the company could hire staff on private sector terms.

On the views that privatisation would mean selling out and losing control of CYTA, the minister said they were exaggerated.

CYTA operates in an open market, meaning it doesn’t have a monopoly anymore, thus ticking one of the boxes of a free market with competition. But there are delays for other telecommunications companies that rely on its network, as the company traditionally views them as competitors instead of customers. The entire system is also heavily politicised, meaning that the slow rate at which public services change negatively affects its processes. Like the EAC, both companies face heavy bureaucracy and high costs that are passed onto the consumer/taxpayer.

In the final analysis, the question has to be asked: what part of telecommunications is a public service these days? When the state was founded in 1960, it had a public duty to ensure telecommunications and electricity distribution, but that was many decades ago. There are other sectors of the state that need attention far more than telecoms and electricity, such as the health sector, education, re-training, culture, agriculture, the lagging retail sector, and diversification through development projects. The economy depends too much on tourism to keep saving its neck in every crisis.

But the obstinacy of trade union leadership, many of whom have mindsets from the 1950’s, hold the state back from modernising effectively. Question is, what are the trade unions doing to modernise themselves to the 21st Century? It was very obvious that their role was unsuccessful in the old Cyprus Airways story; the company’s high costs and rigid staff policies led the company to bankruptcy.

There’s no doubt it’s a difficult time for the economy. Change is always difficult. But it must be managed for the greater good. The trade unions need to ask themselves whether they are being of service to their members by holding the state economy back with inflexibility and old-fashioned thinking. The government needs to ask itself whether it is communicating effectively with the trade unions and proposing joint ways forward. The taxpayers need to ask whether the public sector is being run in a way that doesn’t overburden their already-limited incomes.

The answers to all these questions could result in an economic roadmap that’s post-crisis and has some vision to unite both the private and public sectors for the greater good.