Privatisation plan misses 2018 targets, could meet 2020 deadlines

ASTANA – The midterm results of the Comprehensive Privatisation Plan for 2016 to 2020 show that 465 entities, including state-owned and communal companies as well as assets of national holdings worth 296 billion tenge or US$800.93 million have been sold, out of a total of 532 put up for sale.

Photo credit: 112.ua.

Ninety-six entities are being prepared for pre-sales, while 287 have been sent for reorganisation and liquidation, Minister of Finance Alikhan Smailov reported at the Dec. 11 government session.

In July, Minister of National Economy Timur Suleimenov warned that it was appearing unlikely the privatisation plan would reach its target of 243 entities for 2018.

This year, 155 entities were actually put out, of which 67 are on trading and 88 were sold for 117 billion tenge (US316.58 million). Another eight entities will be put up for sale before the end of 2018, Smailov said.

To date, the privatisation plan includes 922 properties, 48 of which were added Nov. 9.

Prime Minister Bakytzhan Sagintayev commented that the plan remains on schedule overall.

This is the second wave of privatisation in Kazakhstan. In the first wave, between 2014 and 2015, only 37 entities worth 49.9 billion tenge (US$135.02 million) were privatised.

The ministry expects 23 more entities to be privatised in 2019. The list includes Kazakhstan’s seven largest companies, among them the Samruk Kazyna Sovereign Wealth Fund, Kazakhtelecom and Air Astana, as well as the 10 percent of Kazatomprom shares. In November, Kazatomprom sold only 15 percent of its shares for $451 million out of the 25 percent planned to be privatised. Kazakhfilm, the country’s biggest film studio, remains excluded from the list because of the objections of the Mazhilis (lower chamber of Parliament).

“The owner who will buy the studio will certainly carry out his ideology. Our young, talented cinema specialists will be forced to fulfil his imposed order,” commented Mazhilis member Kuanysh Sultanov, as quoted in tengrinews.kz.

Sultanov and other members supporting Kazakhfilm’s exclusion from the plan believe that “if foreign companies buy the film studio, then Kazakhstan will definitely lose its national cinema.”

As for state-owned properties that are in the privatisation plan, the Ministry of National Economy will monitor their activities, Suleimenov said. According to him, they will complete a functional analysis to identify redundant and duplicate functions in 2019.

The ministry plans to introduce a moratorium on the creation of subordinate enterprises (with the exception of those in the social sphere) until 2020. The government will be encouraged to use the potential of existing subordinate organisations. For now, the ministry has been developing a corresponding draft resolution, which is undergoing approval procedures.

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