Business

26 Jul 2019, 17:30 PM

STA, 26 July 2019 - Slovenia's model of temporary posting of workers to other EU countries has been subject to sharp criticism about exportation of cheap labour. The country has seen an exponential growth in such postings over the past ten years and is reportedly third in the EU by the number of posted workers.

 

The Health Insurance Institute (ZZZS), which issues forms to employers posting workers abroad, issued 17,668 such forms in 2008, 103,370 in 2014 and as many as 159,136 in 2017, but the figure fell to 127,059 last year. A worker may be posted abroad several times a year, which means several forms.

The social contributions paid by Slovenian employers for the workers sent abroad do not correspond to the actual pay they earn but to what they would if they did the same work in Slovenia. Posted workers as a rule also get extras such as allowances for separation and higher living costs, so their earnings are higher than if they performed their job in Slovenia.

The strong growth in the number of postings and deductions on social contributions paid by employers has provoked criticism from European interest associations.

The European Federation of Building and Woodworkers (EFBWW) has calculated that Slovenia posts at least 100,000 construction workers to the EU even though it has only 55,000 domestic workers in the industry. Most of them come via Slovenia from the Western Balkans.

This is why the federation submitted a request to the EU Commission at the end of May to investigate the practice and its regulation in Slovenia.

"Slovenia has built a money-spinning business model based on social fraud and worker exploitation. This is totally unacceptable and should be stopped at once," said the EFBWW president Dietmar Schäfers.

The commission has also received complaints from interest groups in Austria, while the country itself has said it will try to engage in dialogue with Slovenia before taking any such step.

Slovenian posting companies have been accused of exporting workforce to the EU at dumping prices as Slovenian labour costs are lower, which makes workers from Slovenia cheaper.

Meanwhile, the Slovenian government has acknowledged that the situation provided food for thought regarding necessary measures.

Slovenia's regulation entails that posting companies need to obtain an A1 document which allows posting temporary workers to other member states and is issued in accordance with the EU legislation by a relevant district unit of the ZZZS.

According to the Labour Ministry, a special task force is examining relevant regulations from 1970, including those governing the social contribution deductions for employers, and drawing up measures to reform them.

Responding to the criticism of the increase in the number of posted workers and worker exploitation, the Labour Ministry told the STA that the transnational provision of services act, which tightened regulations for issuing A1 documents, had been adopted last year.

The law aims to prevent cross-border posting of workers by mailbox companies or employers, particularly in construction and industry, who have already violated regulations, thus tackling worker exploitation, which has been a critical issue.

According to the Labour Inspectorate, there have been 20 violations of the act in 2018.

On the other hand, the ZZZS, which is in charge of revoking issued A1 documents, recorded more than 17,450 irregularities, including over 6,400 tax-related and over 6,300 pertaining to employment contracts.

Foreign authorities have been submitting requests about checking conditions compliance of posting companies or revoking their posting permits to the institute, which has received around 10 such requests by June this year.

According to the ZZZS, the issue is complex and hard to tackle, while Goran Lukič of the Workers' Counselling Office told the STA that the new act somewhat improved the situation even if he is still sceptical about its enforcement.

Meanwhile, Slovenian employers' associations deny the accusations of Slovenia being a kind of gateway for social dumping in Europe.

The Slovenian Employers' Association (ZDS) told the STA that given the amount of labour costs in Slovenia one could not speak about dumping, while the Chamber of Commerce and Industry (GZS) said that it was key that foreign workers who got work permits in Slovenia and ended up working in other EU countries were paying their social contributions and income tax in Slovenia.

26 Jul 2019, 10:25 AM

STA, 25 July 2019 - DARS, the national motorway company, has received five fresh bids in what is the latest chapter in the construction of Slovenia's half of the second tube of the Karavanke tunnel to Austria. Turkish builder Cengiz, already picked in a procedure last year that was subsequently quashed, is the cheapest bidder again.

Cengiz Insaat, which had promised to execute the project for EUR 89.3 million in 2018, now issued a bid worth EUR 99.6 million, DARS announced after opening the bids on Thursday.

Cengiz is followed by Greek J&P Avax with EUR 115 million, and Slovenia's Kolektor CGP, which has partnered with Slovenian engineering company Riko and Turkish company Yapi Merkezi to offer to build the tube for EUR 121 million.

The fourth lowest bid, worth EUR 121.5 million, was submitted by Implenia Österreich in partnership with Implenia Switzerland and Slovenia's CGP Novo Mesto, and the fifth, worth EUR 122.2 million by Slovenia's Gorenjska Gradbena Družba in cooperation with Czech builder Metrostav, which had been the second lowest among nine bidders in 2018.

Bosnia's Euroasfalt and its Slovenian partner Cestno Podjetje Ptujm, which had been among the six bidders invited by DARS into the new round of talks and bids, has not submitted a bid this time.

The bids are now to be examined and the procedure is continuing after the National Review Commission - which annulled the original awarding of the deal to Cengiz with the argument the Turkish company had made subsequent changes to their offer - rejected the call by Kolektor CPG, Yapi Merkezi and Riko to halt the new stage of the procedure.

While Austria is already in the midst of building its portion of the 8-kilometre tunnel, the project has been stuck in the tender stage in Slovenia since it began in 2017, having seen a number of appeals processed by DARS as well as the National Review Commission.

24 Jul 2019, 11:30 AM

STA, 24 July - Telekom Slovenije posted a net profit of EUR 19.6 million for the first half of the year, an increase of 35%, even as sales revenue declined 5% to EUR 340.6 million, the company said on Wednesday.

Group profit before income tax, depreciation and amortisation (EBITDA) rose 11% to EUR 112.3 million and pre-tax profit (EBIT) surged 41% to EUR 23.8 million.

The company said sales revenue was down due to the sale of Blicnet, which was completed in the second half of the year, and lower revenue from fixed segment of the end-user market, primarily due to the completion of the Slovenian e-tolling system in 2018.

Telekom having offloaded most of its foreign subsidiaries in recent years, leaving it only with the Kosovo operator Ipko, the bulk of the sales and profit it generated in Slovenia; Kosovo accounts for less than a tenth of group revenue.

But the interim report also shows the group's position deteriorated overall, with the number of fixed and mobile retail connections dropping by about 2% in Slovenia and Kosovo, and broadband connections down 2% in Slovenia and as much as 7% in Kosovo.

In the first quarter of the year, the latest period for which data is available, Telekom remained market leader in all major segments but it continued to lose market share.

In the key mobile telephony segment, its market share contracted by 3.4 percentage point at the annual level to 41.9%, while in fixed broadband it contracted by over a percentage point to 32.3%.

The majority state-owned company also announced today it would propose dividends of EUR 4.50 gross per share at the 30 August annual general meeting, which would mean distributing around three-quarters of the EUR 39 million in accumulated profit among shareholders.

The proposal is significantly below last year's dividend payout, but it is by no means certain to be endorsed: last year the management proposed a payout of EUR 6.30 gross per share, but Slovenian Sovereign Holding (SSH) succeeded with a counter-proposal for dividends of EUR 14.30.

23 Jul 2019, 12:52 PM

STA, 22 July 2019 - The Chinese owners of airport operator Aerodrom Maribor have put up signs to limit access to Maribor airport, which is currently managed by DRI, a state-owned company, media reported on Monday.

This is the latest twist in the story of Maribor Airport, whose management was handed over to DRI, the state-owned consulting and engineering company specialised in infrastructure projects, in early June.

The government decided for the move after the Chinese-backed Aerodrom Maribor announced in January it was invoking a six-month notice and terminating the 15-year lease agreement it signed in 2017 due to delays in a planned expansion of the airport's runway.

DRI got the operating licence last week, so the airport reopened last Friday after being closed for a day.

But today, signs saying Private Property, No Trespassing, No Parking appeared at the entrance to the parking area.

The Infrastructure Ministry told the STA that the easement in the area of Maribor airport, owned by Aerodrom Maribor, was settled in the land register and that any disputes over the matter would be settled in court.

The ministry assessed that "the Chinese owners who unilaterally pulled out of the lease agreement for no apparent reason are doing this to hinder the operations of Maribor airport and are implementing their interests at Slovenia's expense".

DRI meanwhile told the STA today the signs did not disrupt the airport's operations.

DRI is to manage the airport until the end of 2020 or until the Infrastructure Ministry finds a long-term solution.

The ministry denied in a press release last week claims that Aerodrom Maribor terminated the lease agreement due to delays in the planned expansion of the airport's runway.

It added no deadlines or any other conditions for the state had been set in the 2017 agreement.

The project entails changes to the spatial plan for the area, which is a lengthy procedure and can take several years, it noted.

The Chinese-backed firm SHS Aviation bought Aerodrom Maribor at the beginning of 2017 from Delavska Hranilnica savings bank, signing a 15-year lease agreement with the state.

It made huge announcements when it took over, but few of its plans came to fruition and the airport has been languishing, serving only a handful of charter flights and subsisting mostly on revenue from pilot training.

23 Jul 2019, 11:50 AM

STA, 22 July 2019 - The first of four run-down hotels in the Alpine valley of Bohinj bought in March by Slovenian crypto millionaire Damian Merlak opened its doors after major renovation on Monday.

Aparthotel Triglav, located in Stara Fužina on the eastern side of lake Bohinj and featuring 27 self-catering units, has a new roof, facade, floors, new kitchens, bathrooms as well as equipment. A three- to four-star hotel, it will be slightly more expensive than in the past.

Talks are meanwhile under way for the renovation of Hotel Zlatorog, a 43-room hotel located on the western side, adjacent to the lake's campsite. While the hotel has been closed since 2011 and needs the most work, Merlak's team hopes it will open again in three years.

Also slated for renovation are Hotel Bohinj, which is located east of the lake and is being leased until November, and Ski Hotel Vogel, located some 50 metres away from the ski slopes on Mount Vogel above the lake.

Meanwhile, another dilapidating closed hotel in the Bohinj area, which lies further west of the much more touristic Bled lake, is Hotel Bellevue. Also located at the eastern entry point to the lake, it has been owned since 2017 by Podjetje Pokljuka, which is connected to forestry company Gozdno Gospodarstvo Bled and the Ljubljana Archdiocese.

Aleš Kadunc of Gozdno Gospodarstvo Bled has told the STA that part of the hotel will be torn down, part of it reconstructed, while one segment is under heritage protection. Permits are being applied for and it is not yet clear if construction work can begin next year.

23 Jul 2019, 09:36 AM

STA, 21 July 2019 - Six years after it was launched as one of the first craft breweries in Slovenia, Pivovarna Pelicon has grown into a fully-fledged company with six employees that is looking to crack the million euro revenue mark.

Posting net sales of EUR 584,000 for 2018, up over a quarter on the year before, the company expects annual revenue to rise by about 30% to roughly EUR 900,000 this year, co-founder Anita Lozar told the STA. Virtually the entire profit is reinvested.

The company sells its range of craft beers in Slovenia and Italy. This summer it has decided to enter the Croatian and Danish markets.

Starting off with a single product, a pale ale, Pelicon currently offers nine types of beer and has the capacity to produce up to 250,000 litres of the hoppy beverage a year. It has also branched out from beer to produce a craft gin and a "hoppy tonic" with real quinine.

"Over these six years we've grown, seen where our shortcomings are and slowly started to tackle them. We've slowly improved our product portfolio and started bottling beer. We currently sell half the beer bottled and half on tap in pubs, which we had not been doing before," Lozar said,

About a year ago the brewery also started to work with retailers. According to Lozar, this means having to increase output, which again required production adjustments. "But these are sweet problems," she said.

22 Jul 2019, 09:09 AM

STA, 20 July 2019 - The rating agency Fitch upgraded on Friday the credit rating for Slovenia from A- to A with a stable outlook. Fitch highlighted the lowering of the public debt, the public finances surplus and the country's economic growth among the reasons, the Finance Ministry said on Saturday.

The ministry stressed that this is already the third upgrade for Slovenia by rating agencies this year, which comes to show that the country is in good shape and has been successfully consolidating its public finances.

"Following the April outlook upgrade by Moody's from stable to positive, there was S&P's credit rating upgrade from A+ to AA- in June, and yesterday Slovenia's good shape was also confirmed by Fitch," Finance Minister Andrej Bertoncelj said.

Slovenian presently has an AA- rating with a stable outlook with S&P, an A rating with a stable outlook with Fitch, and a Baa1 rating with a positive outlook with Moody's.

Slovenia has been the most effective eurozone member when it comes to the reduction of public debt and plans to decrease it to 65.4% of GDP this year. It also plans a 0.7% of GDP or EUR 193.6 million budget surplus.

Bedsides the debt reduction, budget surplus and economic growth, Fitch also highlighted good economic relations with other countries, the strengthened banking sector and reduced unemployment.

18 Jul 2019, 17:48 PM

STA, 18 July 2019 - Contractors have completed works on a major logistics centre adjacent to Ljubljana Airport that will be operated by Austrian logistics giant Cargo Partner. Spanning over almost 30,000 square metres, the new facility is expected to help turn the airport area in a major logistics hub.

Engineering company Protim Ržišnik Perc, which oversaw the project, said on Thursday the new facility would have 25,000 square metres of warehousing areas capable of storing 20,000 palettes, plus 4,000 square metres of office space.

It is located right next to a major centre run by Kuehne + Nagel which serves as the biggest logistics facility for Swiss drug maker Novartis in Europe.

When Cargo Partner broke ground on the project at the end of August 2018, the company said it opted for the airport area because of its excellent location and proximity to the seaports in Koper and Trieste.

Several other smaller logistics projects are also in development around the airport, Zmago Skobir, the head of airport operator Fraport Slovenija, said today as work started on a new passenger terminal at the airport

"It all started with the new bypass road. Since then development around the airport has been very fast," he said.

Work starts on extension of Ljubljana airport passenger terminal

STASTA, 18 July 2019 - A cornerstone ceremony marked the start of construction of a passenger terminal extension at the Ljubljana Jože Pučnik Airport on Thursday. The expansion will boost the terminal's capacities considerably and improve the airport's services. The works are expected to take two years, with the total cost of investment exceeding EUR 21 million.

Steps in preparing construction site have already been taken by builders GIC Gradnje and Elcom with whom airport operator Fraport Slovenija signed a EUR 17.3 million construction contract at the end of June.

At the ceremony, Fraport Slovenija director Zmago Skobir said that the journey towards modernising the passenger terminal was a long one, but the German company had started delivering on the promises it gave when it became the airport's operator in 2015.

The terminal extension is necessary due to an increase in the number of passengers in the recent years. The trend is expected to continue in the future - in the next 20 years, the Ljubljana airport is expected to register a 3-4% increase of annual traffic growth.

The airport welcomed a record number of 1.8 million passengers last year and has been struggling with lack of space for a while.

Skobir said he was not concerned over the future of Slovenian air carrier Adria Airways since he was sure that it would adapt to growing passenger traffic rates, which are increasing in line with the Slovenian economy and tourism.

The current capacities of the terminal provide service to 500 passengers per hour, while the new terminal will cater to 1,250 passengers per hour. This will prevent bottle neck at the terminal, including during rush hours in peak summer season.

The terminal will thus get 10,000 square metres of new space, including new retail and restaurant facilities as well as additional 14 check-in desks, two security control points and a new departure lounge.

The extension will delight passengers and ensure long-term development and competitiveness for Fraport Slovenija, said Skobir.

Apart from the expansion, the operator also plans to modernise airport logistics and IT. According to Skobir, Fraport Slovenija is currently in a long-term investment cycle that amounts to more than EUR 40 million.

The German-owned operator will supervise and manage the investment with a team of ten engineers. According to engineering manager Andrej Tominec, the operator aims to open the new terminal in summer 2021 before Slovenia takes the EU Council presidency in July 2021.

The airport will stay open during the whole construction process. The new facility will be a separate unit connected to the existing terminal, located on the site of a former car park.

The building will be a spacious fusion of concrete, wood and glass, reflecting the nearby Kamnik-Savinja Alps, getting a lot of natural light and blending in with its environment, said the Plan B architecture firm, which has designed blueprints.

There will also be a park outside the new facility, envisaged as a refreshing shelter for passengers. A vision of turning the airport into a small airport city is thus coming to fruition, said Skobir.

Fraport Slovenija also plans to renovate the old terminal after completing the extension project.

18 Jul 2019, 09:30 AM

STA, 17 July 2019 - The Administrative Court has stayed the telecoms market regulator's decision to strip the company Telemach of a portion of wireless spectrum which it acquired through the acquisition of Tušmobil in 2014.

The Agency for Communication Networks and Services (AKOS) wanted to take away a portion of wireless spectrum that had been awarded to Tušmobil free of charge in 2008.

The agency wanted to take back two 5 MHz slices of spectrum in the 2100 MHz band on 30 September, planning to release a public call for bids for the spectrum in the meantime.

However, Telemach appealed against the decision with the Administrative Court, which ordered AKOS to suspend all activities in the matter pending the court's final decision, Telemach confirmed for the STA.

The third largest telecommunications provider in the country, Telemach holds about a fifth of the country's mobile telephony market.

The spectrum that is subject to the dispute amounts to less than a tenth of total spectrum that Telemach has at its disposal.

AKOS's decision to withdraw the spectrum was prompted by the Administrative Court, which examined the awarding of the spectrum to Tušmobil free of charge in 2008 and ordered the agency to make a new decision.

The awarding of the spectrum is also the subject of a criminal trial, with former AKOS director Tomaž Simonič charged with abuse of office for giving the spectrum to Tušmobil in exchange for an apartment provided by Mirko Tuš, at the time the owner of Tušmobil.

Telemach acquired Tušmobil in 2014 in a move that bolstered its mobile offerings and made it the number 3 wireless operator in Slovenia.

17 Jul 2019, 11:46 AM

STA, 16 July 2019 - Orpea, a French multinational that specialises in assisted living services, has entered the Slovenian market via its Austrian subsidiary Senecura by purchasing a retirement home in Radenci, eastern Slovenia, called Dosor.

Senecura purchased the facility earlier this year from Radenci municipality and the Austrian bad bank Heta and plans to use it as a springboard for Slovenia, having previously acquired the licence to build several small retirement homes around the country with a total of 310 beds.

The company, the biggest private operator of retirement homes in Austria, acquired Dosor because of the quality of care it provides, favourable location and its reputation in Slovenia, Senecura board member Anton Kellner told the press on Tuesday.

Radenci municipality sold its 50% stake for EUR 1.5 million, while the rest was acquired with the purchase of Heta's EUR 7.6 million in claims to Dosor.

Dosor has 178 beds and 100 employees. It was built as a public-private project in 2008.

Together with the planned network of small retirement homes, the acquisition puts Senecura on track to compete with the biggest Slovenian private provider of elderly care, Deos, which has eight facilities in Slovenia.

There are currently over 100 elderly care facilities in Slovenia offering just over 20,000 places, most of which are publicly owned and operated by municipalities.

All our stories on the elderly in Slovenia are here

17 Jul 2019, 10:34 AM

STA, 17 July 2019 - Ascent Resources, the UK developer of the Petišovci gas field in eastern Slovenia, has reportedly launched administrative dispute proceedings in Slovenia after it was ordered to get a separate permit for hydraulic fracturing.

The move, reported on Tuesday by the Stock Market Wire news portal, comes after the Environment Ministry upheld a decision of the Environment Agency (ARSO) on the controversial gas extraction project in Petišovci.

The ministry agreed that an environmental impact assessment and a separate environmental permit were necessary because the location of the gas wells was close to water sources and because underground waters and agricultural land in the area do not have very good ability to regenerate.

"The decision of ARSO and the Environment Ministry ignores the opinion of the six independent expert bodies whose advice ARSO sought," Ascent said.

The decision mistakenly concluded that the project fell within a conservation area and misapplied EU case law in relation to mitigation measures, Ascent also said as it announced multi-pronged legal action against Slovenia on 14 July, a day before the deadline for the Administrative Court appeal.

Aside from challenging the decision at the Administrative Court, Ascent plans to submit a claim for damages against the state for breach of EU law including for the unreasonably long time it took for the decision to be reached.

The company will seek damages for loss of future income from the project "which would have been expected to have been a multiple of the historic investment of some EUR 50 million."

It also plans to lodge an investment treaty arbitration claim under the Energy Charter Treaty.

All our stories on Ascent Resources are here

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