Supreme Board of Control: National Investment Fund a costly failure

In a report to be published today, the Supreme Board of Control (NIK) is highly critical of the National Investment Fund (NFI) privatization program, referring to it as a fiasco. According to Rzeczpospolita, the NIK states that the implementation of the program did not lower the costs of privatization whatsoever. The average cost of privatizing a company through the NFI program stood at zl. 492,000, 14% higher than the average cost of privatization by other means. On top of this, the State Treasury also has to pay for private-sector management of the NFI funds. According to the NIK, the NFI was mostly profitable for management companies, which are believed to have earned some zl. 526 million from the program. The profits of the managing companies are the subject of fierce disagreement between the NIK and Treasury Minister Wieslaw Kaczmarek, who was the Economy Minister from 1993 to 1997. The NIK had proposed in 1996 that payment to the management companies depend on investment funds' results. However, the management companies were paid on a fixed basis and most frequently their earnings stood at euro 1.6 million annually per company. (Rzeczpospolita, pp. A1, B1) P.J.