Prime Minister Oleksiy Honcharuk has announced that the government sent 530 state-owned companies, with a total combined asset value of about $506 million, for privatization.
“Over the last four months, more state objects were put for privatization than in 28 years of independence,” Honcharuk said on his Telegram account on Dec. 27.
He added that the auctions would start on the Prozorro electronic procurement platform in 2020.
Ukraine has more than 3,500 state companies, according to estimations from the World Bank. They are mostly left over from the Soviet era and have been a source of constant frustration for the country due to poor management and rampant corruption by those who control the state-owned firms.
Soon after coming to office, President Volodymyr Zelensky claimed his team, where Honcharuk is a key player, would sell these assets to attract investment and improve the management of these firms.
Minister of Economy Tymofiy Mylovanov said on Dec. 27 that the list of the state companies for sale would include state-owned distilleries. Parliament passed a law this month that lifts the state monopoly on alcohol production as of Jan. 1, 2020.
The government plans to privatize the notorious UkrSpyrt firm, a state alcohol producing monopoly known for its tax problems, outdated equipment, and poor output quality. The government says it expects to get up to Hr 5 billion ($200 million) for it, according to Yulia Kovaliv, deputy head of the President’s Office.
Mass privatization of state assets was supposed to be launched by Zelensky’s predecessor Petro Poroshenko back in 2014 but never happened. Instead, several Poroshenko loyalists were accused of making money thanks to their control at several big state-run firms.
Observers think that the real test for Zelensky will be the privatization of Ukraine’s most lucrative assets.
One of them is the Odesa port plant, the country’s nitrogen fertilizer producer. The factory has garnered the interest of two highly controversial Ukrainian oligarchs, Dmytro Firtash and Ihor Kolomoisky. Its privatization bid in 2016 failed. Now the State Property Fund says the plant will be sold at the end of 2020.
Another big company for sale is Centrenergo, Ukraine’s second-largest electric and thermal energy generator. It was also planned for privatization under Poroshenko’s presidency but instead became the focus of an anti-corruption investigation by the Specialized Anti-Corruption Prosecutor’s Office, involving Poroshenko and his business partner and former deputy Ihor Kononenko.
Deputy economy minister Pavlo Kukhta claimed that Centrenergo could be privatized in 2020 or 2021.
