Alex Kush
Economist, financial analyst
Privatization – 2019. Why in Ukraine is not sold Turboatom and CHP
Illustration: 2019-god.com
Ukraine in solving the problem of the sale of state-owned enterprises today is in a state of “obvious but unbelievable”
21.01.19 61000
Can you imagine the company that installed annual production plan 21.3 billion, and the real amount was a few hundred million, that is a pathetic percentage? What should voluntarily to the Director do such a “successful business”, and the shareholders force?
The answer is obvious even for someone brought up in the spirit of a planned economy.
But the businessman, accustomed to terms such as cash flow or EBITDA, and all of such figures may fall into a state of cognitive dissonance.
But the state office is possible. Ukraine today is in a state of “obvious but unbelievable”.
State oil and gas company, focused on budget subsidies to household consumers of natural gas and draconian prices aforesaid, a report about new records and claims to the transfer to the budget more than 120 billion UAH. So part of the rage that almost Budenovsky style cries out: “give new price of gas for the population, big and different.”
And in parallel, as if in another reality, there is a modest Desk – the state property Fund, – which, under the initial privatization plan for 2018 21.3 billion and reduced the “obligation” to the level of 18,8 billion attracted in the Treasury a measly 355 million. Formed a hole in the budget traditionally cover the loans. And so it continues from year to year, when budget revenues from privatization turns into a regular hidden deficit.
In 2019, the situation can and should be repeated with enviable stability worthy of a different application.
The Cabinet approved a new list of “big privatization”, and there will be no Turboatom or four CHP (Kherson, Kiev, Krivoy Rog and Severodonetsk).
Particularly notable exclusion from the list of Turboatom included in the top 50 state-owned companies and is able to earn net profit of a few “yards” in the year and has a package of export contracts, for example, to supply equipment for NPP “Kozloduy” in Bulgaria. Only one Ukrhydroenergo can create a package of orders for the enterprise to the billions of hryvnia.
And not the fact that from a dead point will move the process of privatization of such giants as Centrenergo and Odesa portside plant.
The first object may lose much value due to its inclusion in the updated list of sanctions of Russia against Ukraine, as systemic investors don’t like it when the company imposed a similar stigma. Even though it is the Russian sanctions, but for a Bank clerk in the West, which will put the visa under the decision of the credit Committee on the financing of the deal, Russia is a member of various transnational structures and one of the possible suppliers of coal to the same Centrenergo.
- See ALSO: Looking investors. Who will get the “Centrenergo”
Means, will buy “their”, but they have no money, except that any state Bank “China will Finance”, that is, the state will shift money from one pocket to the other, simultaneously giving the private sector the largest energy asset. As for the suffering of the HMO, its privatization is complicated by the outstanding loan in the amount of several hundred million dollars for gas purchased from the company, which is associated with well-known oligarch.
A large sale of state property restrains an extremely low level of investment attractiveness of the national economy
There is some proportion, to violate that will not work, even if you really want. For example, from year to year, the government plans to raise from the privatization of the equivalent of $800 million, despite the fact that the amount of foreign direct investment, which “walked” in our economy last year was just over $2 billion.
But we are talking about the entire real sector, including banks, trade, industry, agriculture and other industries. With this capitalization of the country, you can count on tens of millions, the proceeds from the sales, but the main features to move will fail. That was proved by 2018, although this year adopted a new law on privatization, approved by the IMF, which suggested the involvement of “investment advisers” and a quick sale with the price reduction.
As a result, “was domaniales” so that the SCR almost sold for mere pennies, and evaluation of regional power was even less than these companies would have earned for the year in only one RAB-tariff (the so-called investment premium in the price of electricity paid by the consumer).
Well, noble investamerica in anticipation of the “correct estimates” so gnawed each other that the sale of part of state assets were simply blocked in the courts.
If you look at the example of Western countries, the privatization process there has already passed the full life cycle selling of state companies, the awareness of the undervaluation of the assets sold, the introduction of a “tax wind” when private owners pay extra tax on the increased capitalization of purchased the state assets, partial privatization and attempts again to sell.
And our elites continue to thrash around like a mouse in the oven, solving a dilemma, stuck in the splits between “all sell for one hryvnia” and “this cow is we need ourselves.” As a result, during the years of independence the state has attracted from the sale of state property not more than 67 billion UAH, which is comparable to the capitalization of the Deposit guarantee Fund in recent years.
And as a consequence mount stupid. Who can’t sell effectively, selling under duress. That is why privatization list has long been a part of the Memorandum with the IMF.
As said Vladyslav Rashkovan, now a functionary of the Fund, and previously one of the leaders of the Bank in 2014-2016, and nearly “head cleaning” of the banking system: “Who said that Railways cannot be privatized? Who said that customs have to be public? Who said that hospitals, kindergartens, schools, universities should be public?”.
Thus, while the local clans are fighting for the IPF or Turboatom, and in the style of the bride “so don’t get you to anybody”, external creditors have been prepared to ensure that to pay off the debt our country will have to “drain” in the form of Railways and kindergartens.