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Government considers privatization program

June 28, 2013, 10:40 UTC+3

By the beginning of 2017, the state plans to privatize up to 97 percent of open joint stock companies (OJSC) with public ownership

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A government session on Thursday considered Russia’s privatization program. Prime Minister Dmitry Medvedev expressed displeasure with a constant failure to fulfill plans which, as he believes, is connected not only with the market situation but also with the lobbying.

Judging by all, the current program will not be implemented, the Nezavisimaya Gazeta believes. Meanwhile, the budget needs the money taking into consideration its growing deficit. And those 1.7 trillion roubles that the state expects from sales would be useful.

“The privatization plan has never been fulfilled. This is connected, of course, with the market situation, but let us say sincerely that this is connected with the energy, the lobbying of certain departments and separate officials that are often ready to lay themselves out not to let sale something thus losing control over this or that set of property,” the newspaper cites him as saying.

The newspaper reminds the readers that under the draft privatization plan and main directions of privatization of federal property in 2014-2016, it is planned to sell stocks of shares in 436 joint-stock companies and 513 federal unitary enterprises. As Russian Minister for Economic Development Alexei Ulyukayev said at the session on Thursday, this is up to 1.7 trillion roubles that the budget could get. According to him, by 2016 the state plans to fully exit from telecommunications operator Rostelekom OJSC, alcohol producer Rosspirtprom OJSC and the Vnukovo airport. The minister also confirmed plans to reduce the state’s share to 75 percent plus one share in Russian Railways, Transneft oil company, Uralvagonzavod machine-building company as well as other companies.

According to analyst from Investkafe analytical agency, Timur Nigmattulin, at the present moment there are two main reasons for deferring privatization of state companies - a negative trend on the Russian financial markets and unsolved problems inside the companies themselves. However, according to the expert, this year the budget may be implemented in full without privatization money. And the money from the sales of state companies will be needed mainly in 2014-2016. So the state has a time margin for choosing the best moment for the sale.

By the beginning of 2017, the state plans to privatize up to 97 percent of open joint stock companies (OJSC) with public ownership, retaining only strategic enterprises (natural monopolies, the defense sector), the RBK Daily writes. No less global are plans to liquidate unitary enterprises, leaving no more than 100.

Russian Agricultural Bank (Rosselkhozbank) and leasing company Rosagrolizing OJSC were not put into the privatization plan. A special plan of events to restructure them and transform them into development institutions is being prepared. It was also decided to postpone the sale of shares in the United Aircraft Building Corporation and the United Shipbuilding Corporation till 2024.

The sale of shares in Zarubezhneft oil company is also postponed to 2020 (decreasing to 50 percent plus one share). The state plans to reduce by the end of 2016 to 25 percent plus one share its share in ALROSA diamond company, Sovkomflot shipping company and Aeroflot carrier, and to 50 percent plus one share in VTB Bank, RusHydro hycroelectricity company and Rosneft oil company.

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