KYIV

Ukraine’s State Property Fund has organised more than 1,500 privatisation auctions this year, selling off assets for a total sum of more than 2.2 billion hryvnias ($82.9 million), the Fund’s head was quoted as saying by its press service.

“Privatisation is, above all, the transformation of unprofitable assets into productive assets,” Dmytro Sennichenko was quoted as saying. “And it is for that reason that we have held more than 1,500 auctions…”

He said the process of privatisations should be accelerated and called for prompt passage of legislation now before parliament intended to ease the privatisation process of lower-profile sites subject to legal difficulties, court proceedings or debt that have held back their sale. The bill under debate provides for 10 percent of selloffs to be channelled to local authorities to encourage councils to support selloffs of lower-profile sites.

Sennichenko has repeatedly said the aim of the privatisation process was to create fully transparent and competitive sell-offs and eliminate any notion of the privatisations plagued by corruption in the immediate aftermath of the end of Soviet rule.

HISTORY OF DUBIOUS PRIVATISATIONS

In the most notorious of corrupt privatisations in post-Soviet Ukraine, former President Viktor Yushchenko ordered a new selloff of the Kryvorizhstal steel mill in 2005 – it was bought by Mittal Steel for $4.81 billion, about six-time the original selloff price.

Commentators have long suggested that the principal impediment to privatisation in Ukraine lies in the country’s failure to uphold and guarantee fair and transparent auctions.

The government has said it hopes the privatisation of large state-owned companies suspended a year ago over the COVID pandemic would raise as much as 12 billion hryvnias ($430 million).

Among the sites due to be sold off is the First Kyiv Machine Building Plant – a local landmark popularly known as “Bolshevik” and founded in 1882 – with a proposed starting price of 1.398 billion hryvnias ($52.7 million). The plant has debts of more than 500 million hryvnias that, according to the auction conditions, should be prepared by the owner. In addition, investment in the amount of 57 million hryvnias will be needed for its repair and modernisation.

Another big state-owned enterprise, the United Mining and Chemical Company, a titanium and zirconium miner, has been rescheduled for later this month after an initial attempt to sell it off ran into scheduling difficulties. A starting price of 3.7 billion hryvnias (about $136 million) had been set.

Foreign interest has come from companies in the U.S., India, Japan, Australia, Estonia, Turkey, the UAE, Britain and Hong Kong.

In addition, the government included on a list of selloffs Turboatom, 75.22 percent of which is state-owned, and the Electrotyazhmash plant. Both companies are based in the city of Kharkiv. Turboatom is the only Ukrainian manufacturer of turbine equipment for hydro, thermal, and nuclear power plants. Electrotyazhmash specialises in the production of powerful hydro generators, turbine generators for thermal power plants and nuclear power plants, electric motors for drives of rolling mills, mine hoists, traction electrical equipment for railway and urban transport.