Translated material
Looking to the future
The list of enterprises proposed for privatization in 2001 was also generally approved. The list, which is included as an appendix to the law on the federal budget for 2002, contains about 450 enterprises: about 300 joint-stock companies and about 150 state unitary enterprises (SUE).
To fulfill the budget target, it is enough to sell several large objects. Two of them were named yesterday: more than 19% of the shares of Slavneft and “almost” 17% of the Magnitogorsk Iron and Steel Works.
The compilers of the list followed a certain logic, which MI characterizes as “planning and pragmatism.” In 62% of joint stock companies sold by the state, the stakes are less than blocking, and only four enterprises are sold completely. It was decided that the majority of sales will come from the agro-industrial complex, fuel and energy complex and transport enterprises.
The JSCs included in the list meet three criteria: they are not included in the list of strategic enterprises (prohibited for sale by the president), they are not city-forming companies and they are not monopolists in their field. Such businesses may be offered for sale in the future, but there are no plans to sell them next year, Mr. Braverman said.
The list approved yesterday is not final. The government can make additions to it until December inclusive. However, according to the deputy minister, there are no plans to significantly expand the list. Thus, MI will not be able to fulfill its previously made promises to sell up to one and a half thousand enterprises in 2002.
The slowdown is not least due to the fact that each of the enterprises included in the list is accompanied by a “justification”. This means that the Ministry of Property itself, and then an independent appraiser, understands in detail the financial condition of each property proposed for sale, studies the composition of its shareholders, and then, based on the collected data, makes a decision on the feasibility and method of its sale.
If we summarize what Mr. Braverman said, it turns out that in the future the government may become a serious player in the property market. Thus, the deputy minister said that in some cases the state intends to first buy additional stakes, including those of enterprises for which demand is “limited,” and then sell them at a profit.
This proposal, like many other provisions of the new privatization strategy, cannot be applied under the current legislation. The concept was developed with the expectation that significant changes to the relevant legislation would be made in the fall. And the provision on the sale of property together with land can be applied only after the adoption of the Land Code. The government is not bothered by this.