Ukrainian Economy Minister Aivaras Abromavicius argued on Sept. 12 that delays in privatization were due to the need to ensure the transparency of auctions.
Nearly two years after the start of the EuroMaidan Revolution, Ukraine has failed to carry out large-scale privatization. To many, it looks as if Ukrainian authorities are dragging their feet on privatization.
“Our Western partners in particular were against a rushed privatization, and it was obvious that the risks were high that some particular prime assets on the list now would end up in the hands of the oligarchs,” Abromavicius told the Kyiv Post at the Yalta European Strategy forum in Kyiv. “I don’t want to be associated with that type of privatization. No, I’m out.”
He said that he would consider privatization successful when the two biggest assets on the list would be sought by international strategic investors with a transparent shareholder structure.
One of the first state firms to be sold will be the Odesa Port Plant, a chemical company, Abromavicius said. An investment bank for the privatization auction will be chosen by Sept. 13, he added.
Abromavicius admitted that “state-owned enterprises continue to be a drag on the budget, endless pits of corruption and sources of massive financial machinations and manipulations.”
He also welcomed the Odesa Reform Package, a piece of legislation on deregulating the economy and reforming the civil service that Odesa Governor Mikheil Saakashvili plans to submit to parliament this month. “I do hope it’s something substantial, and I do wish them success,” Abromavicius said. “I think they’re sending the right messages.”
Meanwhile, Infrastructure Minister Andriy Pyvovarsky told the Kyiv Post that seaports and Ukrainian Railways cannot be privatized because it’s banned by the law.
He said, however, that private investors should take part in concession agreements for toll roads.
“This is absolutely necessary for this country,” Pyvovarsky said. “Without toll roads, it’s impossible to upgrade infrastructure because the government won’t have enough money, given that 97 percent of the roads are in a terrible condition.”
He said that the ministry had launched the first pilot toll road project but it had been deemed unsuccessful because potential investors wanted to charge excessive tolls.
By the end of this year, the Infrastructure Ministry plans to introduce amendments making it easier to build toll roads, Pyvovarsky said.
Kyiv Post staff writer Oleg Sukhov can be reached at [email protected]
