(AP) – Ukrainian lawmakers on Oct. 18 called on the government to impose a moratorium on the privatization of the country’s biggest steel mill in a last-ditch bid to block next week’s auction.
Ukraine’s State Property Fund announced Monday that three companies – including the world’s largest steel producer, Netherlands-based Mittal Steel Corp. – had submitted applications to participate in the Oct. 24 auction of the 93.02 percent stake in Kryvorizhstal.
The number is lower than government officials had expected, but officials are still hoping to get at least $2 billion (1.6 billion euros), well above the $800 million (665 million euros) paid in last year’s canceled sale.
Ukraine’s 450-member parliament approved in the first reading Oct. 18 a proposal that calls for a moratorium on Kryvorizhstal’s sale. The measure passed in vote of 255-7, with 137 lawmakers refusing to cast ballots. Lawmakers also approved in a 256-7 vote, with 132 lawmakers not voting, a measure to include Kryvorizhstal in the list of state enterprises not eligible for privatization.
Both measures must pass in two more votes to be adopted, and it was not clear when either would be brought up again.
A third measure, which is nonbinding, recommended that President Viktor Yushchenko take measures to ensure that Kryvorizhstal is not sold into private hands.
While the Oct. 18 parliamentary votes appeared unlikely to stop the auction, set for Oct. 24, it sent a clear signal of opposition to the government.
“The sale now is extremely untimely,” said lawmaker Lyudmila Kyrychenko, a co-author of the proposals calling for a moratorium on the mill’s sale. “We’ve lost so much ground in terms of international investors in the last few months … these investors they won’t give us what we are expecting.”
Bogdan Gubsky, a lawmaker with former Prime Minister Yulia Tymoshenko’s faction, argued however that Ukraine would receive significant funds, which the country could use to boost social programs.
Kryvorizhstal produces more than 20 percent of all metallurgical products in Ukraine. When it was sold last year, some of the world’s largest steel companies, including Russia’s Severstal and U.S. Steel, cried foul after their higher bids were rejected.
President Viktor Yushchenko had made the cancellation of the sale a campaign issue during last year’s Orange Revolution.
After a long legal battle, the Ukrainian government seized control of the mill in June, calling the earlier sale an outright theft. The decision to resell it is part of a bid to bring desperately needed funds to Ukraine’s cash-starved state coffers.
Volodymyr Zubanov, a lawmaker from the opposition Party of the Regions, who also co-authored the measure calling for the moratorium, said that any sale should be postponed until after the March parliamentary elections.
