July 2000

FYR of Macedonia Update Memo

The following report outlines new developments in the past three months and the state of on-going developments.

Memo: The bids to the World Bank tender for the telecommunications of the Electric Power Company are being evaluated. New USD grant for the Macedonian Railway to improve its information and telecommunications infrastructure.

1. The interaction between business and regulatory constraints

1.1 The regulatory background

There are no changes in the Macedonian Telecommunications Act according to which:

• The Macedonian Telecommunications (http://www.mt.com.mk/index.html) shall have the exclusive right, until 31 December 2005, to provide fixed voice telephony services, telegraphy services, telex services, public pay phone services, and leased line services, and to construct, own and operate fixed public telecommunication networks.
• The Minister of Transport and Communications shall issue concessions for different types of telecommunications activities.

1.2 On-going regulatory developments concerning alternative networks

The intention for the partial privatisation of the Electric Power Company in the near future has been announced.

2. Inventory of the major "public" utilities with a potential for use in IS applications

So far, own telecommunication networks have been established by Macedonian Railway, the Electric Power Company of Macedonia and Makpetrol-TEAS (established by the Macedonian leading Oil Company).

The investments in the modernisation of the public enterprise "Macedonian Railways" ("Makedonski Zeleznici", MZ), is critically important for the Macedonian part of the Corridor-8 (East-West Balkan Corridor). Its restructuring is suggested within the feasibility study for the Macedonian railway sector, financed by USTDA within SBDI. According to the Minister of Transport and Communications, Mr.Spirkovski, the Macedonian Government, being the major owner of MZ, is considering directing part of its dividend from the privatisation of Macedonian Telecom for the reconstruction of Macedonian Railways. It is expected that the modernisation and reconstruction of the enterprise will not only make it more competitive in the transport business, but will also alter its capacities as an alternative provider of network services.

After some time of latency, the investment activities on the Trans-Balkan Corridor have gained a momentum. On June 13th 2000, in Tirana, Albania, representatives from the American Trade and Development Agency, TDA, signed several contracts for financial grants to Albania, Macedonia and Bulgaria for several projects which are part of the SDBI - South Balkan Development Initiative.

The public enterprise "Macedonian Railways" received a grant for the modernisation of its information and telecommunications infrastructure supporting the railway network. This project is a part of the regional project for the Balkan Communication Corridor, East-West. The modernisation will undoubtedly enhance the capacities of the infrastructure as a chain along the corridor, as well as the potential of "Macedonian Railways" as an alternative telecommunication services provider (see the corresponding entry in the ESIS II database - US-TDA Grant for Modernisation of the information and telecommunications infrastructure of Macedonian Railways).

A World Bank tender has been announced for the Electric Power Company of Macedonia concerning the optical grounded wire (OPGW) (http://www.esmak.com.mk/); presently the proposals are being evaluated. The company will carry out on its own the installation of the cable in the next 6 months. The next phase of purchasing the SDH equipment is planned for the end of 2000. The whole project should be carried out in a two-year period.