Ukrtelekom Privatization Running Out of Time
Prime Minister Viktor Yushchenko attended a board of directors meeting Ukrtelekom on February 26. Without doubt, this was connected with the projected privatization of the company, which is expected to be an important source of budget revenues in 2001. However, time is running short. As late as last week, the government approved the procedure of a tender to identify an advisor to help with the placing of Ukrtelekom shares. This advisor is likely to be selected in April. Meanwhile, a scandal is evolving around the firm, an almost obligatory feature of privatization in Ukraine.
The Day has already reported the Golden Telecom (GT) Company is suing Ukrtelekom for breaching the antimonopoly law. Deputy Chairman of the Antimonopoly Committee of Ukraine Vasyl Suprun told The Day that the crux is: “Golden Telecom Ltd., having secured a State Committee for Telecommunications license to operate on international long-distance telephone markets, turned to Ukrtelekom for specifications in order to connect with the Ukrtelekom networks. Ukrtelekom was withheld the specifications for six months, while a service of this kind is supposed to be furnished within one month. After receiving the specifications, GT placed an order for a Ukrtelekom Kyiv-based connection project with a research institute, purchased the required equipment, but was denied connection by Ukrtelekom in spite of a proper request. When Ukrtelekom was approached again, it suggested that GT connect to the grid in a different region under different specifications.
“Such actions by Ukrtelekom run counter to the norms in force, clearly show the signs of breaking the antimonopoly legislation, and obstruct the activities of a licensed GT operator on the telecommunications markets. Today, the Antimonopoly Committee is drafting its conclusions on Ukrtelekom’s behavior.”
According to Chairman of the Verkhovna Rada Ad Hoc Commission for Privatization Oversight Oleksandr Riabchenko, this situation will not affect the Ukrtelekom privatization process: all over Europe, not only in Ukraine, telecoms hold a monopoly on telecommunication markets, which can raise problems connected with the rules of competition. “If Ukrtelekom were not a monopolist but a competing entity, its attractiveness would be seriously called into question,” the people’s deputy noted.
“A monopoly image is more attractive than the usual one for investors in Ukraine,” adds Vitaly Marhulis, general director of the Ukrkolsanting Association.
A somewhat different view was expressed by Mykhailo Chechetov, deputy chairman of the State Property Fund of Ukraine: “Experience confirms that whenever privatization is connected with pre-court or court litigation, this always negatively affects the investment climate of such enterprises... In addition, with Ukrtelekom, we are playing this game in deep time trouble.”
