Management of State-Owned Enterprises
One major responsibility of the Federal Ministry of Finance is the management of state-owned enterprises. This term covers the management of equity interests the federal government holds in commercial enterprises (particularly where such enterprises are cast in the legal form of a stock company – AG – or a limited liability company – GmbH). This task is delegated to the Ministry of Finance under the terms of the Austrian Federal Ministries Act.
Tasks & Duties
The federal government’s ownership interests are represented either by the Federal Minister of Finance personally or by an agent appointed by him. The main task performed by the Federal Ministry of Finance in the realm of managing state-owned equity interests is to ensure that the state-owned enterprises, which are extremely diverse in terms of their fields of activities, are managed according to the principles of frugality, expediency and profitability.
An essential condition in order to represent the federal government’s interests in an optimal way is the constant flow of communication between the decision-makers, the directorates at the Federal Ministry of Finance and other ministries involved, corporate bodies such as the managing directors or executive boards and supervisory boards of the enterprises in question. This goal is likewise promoted by a set of legal as well as management and accounting tools, most notably in the form of investment and financial controlling.
OIAG – Holding and Privatisation Management for Austria
One significant enterprise held by the Federal Ministry of Finance is Oesterreichische Industrieholding AG (OIAG). OIAG is in the sole ownership of the Austrian federal government (with the Federal Minister of Finance as shareholder representative). OIAG not only completely retired the debts of the previously nationalised industry sector within only a few years by way of successful privatisation management, but is also making dividend payments to its shareholder – the federal government – which significantly help to ease the demands placed on the federal budget.
In addition, the Federal Ministry of Finance acts as a representative of the federal government in respect of the government’s equity interests in Oesterreichische Nationalbank, Hypo Alpe-Adria-Bank International AG, Kommunalkredit Austria AG, KA Finanz AG, Österreichische Bundesfinanzierungsagentur (ÖBFA), Bundesbeschaffung GmbH (BBG) and Bundesrechenzentrum GmbH (BRZ).
Portfolio of Equity Holdings
The portfolio of the Federal Ministry of Finance is supplemented by further federal government equity holdings, such as road construction companies including Großglockner Hochalpenstraßen AG (GROHAG), Felbertauernstraße AG (FAG) and Villacher Alpenstraßen-Fremdenverkehrs GmbH. The Federal Ministry of Finance acts as a shareholder towards third parties by exercising shareholder rights at the annual shareholders’ meetings of the various entities (stock companies or limited liability companies).
Investment & Financial Controlling
Investment controlling requires quarterly commercial reporting from enterprises owned by the Federal Ministry of Finance with respect to their monetary and non-monetary key performance indicators, on the basis of forecasting and variance analyses. Financial controlling covers payments by the federal government to the enterprises in question and income received by the federal government from those enterprises, as well as any outstanding loans and guarantees the federal government has granted.
However, investment and financial controlling pertains not only to the equity interests of the federal government which the Federal Ministry holds on its behalf; it also covers – pursuant to the relevant provisions of the Federal Budget Act – approximately 80 further privatised legal entities managed by other ministries (e.g. federal theatres, federal museums, ASFINAG, etc.). In the very near future, investment controlling will be supplemented by a risk-controlling process which is intended to illuminate the potential financial risks of individual enterprises.
The foremost strategic goal in the management of state-owned enterprises is to ensure the profitability and competitiveness of equity interests held by the Federal Ministry of Finance, in accordance with domestic and international best practices.