Financial management and transparency in public enterprises

Today, GAP Institute, Group for Legal and Political Studies (GLPS), and Institute for Development Policy (INDEP), under the “CIVIL SOCIETY SUPPORT TO ENHANCE PUBLIC OVERSIGHT AND ACCOUNTABILITY OF PUBLIC INSTITUTIONS OF KOSOVO” Project, supported by the British Embassy in Kosovo, held a press conference, where the findings of the “Financial Management and Transparency in Public Enterprises" report were presented to the public.

The data in the report indicate that Publicly Owned Enterprises (POEs) in Kosovo continue to face numerous problems, which often times affect the quality of services offered. These POEs perform services of primary importance for citizens, including: water supply and management, sewage treatment, telecommunication, waste management, postal, energy and transport services.

The report shows that the majority of POEs have difficulties with strategic investments and service expansion planning, have managerial and operational problems, are overstaffed, and operate at a loss. A number of POEs, including Telekom, instead of generating dividends, rely on government subsidies to operate in the market.

The pandemic period was the most challenging year for these enterprises, namely 2020, with 17 central POEs generating revenues of 329 million EUR, while incurring expenditures of 333 million EUR in the same period. The only POE in this period that operated at a profit was the Kosovo Energy Corporation (KEK), with a net profit of 24 million EUR in 2020.

In 2021, of 17 POEs, 11 have increased their revenues compared to the previous year. 

For regional water-supply enterprises, the most significant issues are the low rate of billing and collection. In 2020, the average billing of all regional water-supply companies did not exceed 50% of the water used.

On the other hand, expenditures recorded the highest increase for the category of wages and salaries. The average salary in POEs is 768 EUR. In other public sectors, this average is 612 EUR. In the private sector, the average salary is 418 EUR, or 350 EUR less than that in POEs.

In addition, the 2017 data for central POEs indicate a higher share of employment of men. In POEs such as KEK, the employment of women is only 5.5%, in Infrakos 6%, RWC Prishtina 12%, and Telekom 26%.

Central POEs also face significant issues with transparency, with a significant number of documents that should be made public on their official websites missing. The Policy and Monitoring Unit of Publicly Owned Enterprises (PMUPOE), within the Ministry of Economy, is no exception to this, with the last documents published on its website related to public enterprises dating from 2018. For several years now, this Unit has failed to publish the performance report of POEs, despite this being a requirement under the Law on Publicly Owned Enterprises.

You can download the full report here.

The Project “Support to civil society to increase public oversight and accountability of Kosovo public institutions” is funded by the Foreign, Commonwealth and Development Office through the British Embassy in Pristina.

The contents of this publication are the sole responsibility of the GAP Institute (GAP), Group for legal and Political Studies (GLPS) and Institute for Development Policy (INDEP), and do not necessarily reflect the views of the Foreign, Commonwealth and Development Office.