Government • 16 October, 2018

Execution of the Comprehensive Privatization Plan: 444 properties sold

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At the Government meeting chaired by the Prime Minister of Kazakhstan Bakytzhan Sagintayev, ministers of Finence Alikhan Smailov and National Economy Timur Suleimenov reported on the progress of privatization.

Minister of Finance Alikhan Smailov reported on the implementation of the Comprehensive Privatization Plan, current results and measures taken to accelerate the privatization process. Thus, out of 887 Plan objects, 524 were put up for sale. To date, 444 of them have been sold. At the stage of reorganization and liquidation are 287 objects. For 12 objects, the State Commission for the Modernization of the Economy of Kazakhstan made a decision to exclude from the list of privatization objects.

“The implementation of the Comprehensive Privatization Plan taking into account the objects being reorganized and liquidated today is 83.7%,” said Smailov.

In 2018 it was planned to put up for sale 257 objects. Actual performance is 137 objects. It was decided to  reorganize and eliminate 47 objects. In addition, a proposal on privatization in a single lot was made for 14 limited liability partnerships in the sphere of highways (Kazakhavtodor): today, work is underway to reorganize them into one partnership. Of the objects on display in 2018, 63 were sold for a total of 74 billion tenge.

In turn, out of 63 top-end facilities of the Comprehensive Plan, 17 of have been sold for the total of 125 billion tenge. In 2018, 39 top-end facilities were planned for sell, of which 16 were put up and two are subject to exclusion on the basis of decisions of the State Commission. Of these facilities, four have been sold. The rest of the objects are at the auction and in the stage of pre-sale preparation and negotiations with potential buyers.

Reporting on measures taken to accelerate the privatization process, the Minister of Finance announced that following a meeting of the Government July 17, an order was given to revise the privatization road maps within a month, with the postponement of sales from the end of 2018 to September - October 2018 also ensure the sale of the planned facilities until the end of the year.

According to the monitoring data, at the beginning of August there were 33 objects of communal property, national holdings and social-entrepreneurial corporations, which had been proposed by sellers at the end of 2018. As a result of the work carried out on 31 objects by sellers, the time limits for issuing were corrected (no later than November 1, 2018), and the measures for the objects subject to liquidation were also accelerated.

“Taking into account the inventory conducted by the Ministry of National Economy, the Comprehensive Plan is proposed to be supplemented with another 48 objects of privatization. These are objects of republican, communal ownership and social-entrepreneurial corporations,” said Smailov, noting that if approved, the objects will be put up for sale by the end of this year with possible implementation in January - February 2019.

In conclusion, the Minister of Finance noted that, in general, the privatization process is proceeding at an established pace. Until the end of 2018, another 54 objects, including 12 objects of republican ownership, 12 objects of communal property, and 30 assets of national holdings and social-entrepreneurial corporations, are subject to be billed.

The Minister of National Economy Timur Suleimenov, in turn, stressed that unsold objects, based on the results of three auctions, are subject to liquidation. However, today there are unsold objects for which there are no liquidation decisions. In this regard, government agencies need to step up work to complete privatization in the current year.

At the same time, according to the instructions of the Head of State, a complete inventory of the quasi-state sector objects was carried out, following which it is proposed to reduce 621 organizations.

Of the 172 objects proposed for privatization, 48 are included in the Comprehensive Privatization Plan. They are proposed to be implemented by the end of the first half of 2019. The remaining 124 objects will be implemented in a competitive environment within the framework of internal corporate procedures.

In addition, Timur Suleimenov reported on measures to improve legislation on privatization. Thus, as part of the fulfillment of the instructions of the Head of State regarding the sale of state facilities not lower than the market value, amendments to the Civil Code and the Law on State Property have been developed, which provide for granting the right to sell privatization objects not lower than the starting price to the only participant in the first tenders.

Also, in order to establish the possibility of preserving socially significant facilities that were not sold on the basis of the results of three auctions, it is proposed to provide competence to the authorized body on state property or the local executive body (depending on the ownership of the asset), in consultation with the antimonopoly authority realized by the results of three conducted trades.

Following the consideration of the issue, the Prime Minister Sagintayev noted that, in general, the sale of objects is on schedule. However, the central state and local executive bodies and holdings should pay attention to the timing of the privatization of certain objects and speed up their sale. At the same time, in accordance with the instructions of the President, privatization should meet the criterion of the maximum benefit for the state.

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