Cabinet Allocates €2.5m for City of Martin in Forced Administration

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Government allocates financial assistance for City of Martin in Forced Administration (photo by TASR)

Bratislava, March 30 (TASR) – Financial assistance of €2.5 million will be provided to the city of Martin (Zilina region). It’s the first budgetary measure adopted by the new Government at its first session on Wednesday.

The Finance Ministry introduced forced administration on the City of Martin last Thursday (March 24) following its problems with a lost legal dispute involving a €8.6-million compensation to be paid to a private firm. “Introduction of forced administration in the situation the city has found in is good news,” said Martin mayor and Parliamentary Vice-Chairman Andrej Hrnciar (Siet/Network). “It will enable us to meet our contractual obligations that we were unable to repay due to frozen accounts. At the same time, life in the city will continue, even though it will be limited to a certain extent. We’re doing our best to resolve the situation as soon as possible, and prevent the people of Martin from paying for past mistakes.” He wasn’t the mayor when the events leading to the property dispute took place.

Finance Minister Peter Kazimir (Smer-SD), who submitted the proposal for the assistance, explained that it will serve to ensure the functioning of the city. Martin will have to repay the money within ten years.

Martin has lost over €2.6 million since its accounts were frozen prior to the forced administration being introduced. Meanwhile, fees from citizens are still being deposited into frozen accounts and a distraint order is enabling the money to be withdrawn on a daily basis on behalf of the plaintiff in the court case.

“The City of Martin is unable to cover its operating expenses  or perform duties stemming from contractual relations. It is interested in resolving the crisis through a loan that would be used to settle the rest of the debt. However, the loan will not be enough to compensate for the money that has left the City’s coffers and gone into the distrainor’s account,” reads the Finance Ministry in its document.

According to the ministry, the City might have a problem to finance the liquidation of its municipal waste. As well, public city transport will be affected, along with public lighting, greenery, the operation and teacher pays in kindergartens.

Initially, the City of Martin was obliged to pay over €8.6 million to PK Faktoring, owned by lawyer Peter Kubik, over a lost court case involving Martinske Hole Ski Resort. The case concerns alleged violation of certain legal commitments dating back to the mid-1990s. The claim emerged after Martin, then under mayor Stanislav Bernat (1994-2006). The City allegedly failed to meet contractual obligations to register real property under the ski resort Martinske Hole on behalf of the actual property holder. Nonetheless, the City of Martin assigned the property to a different company.