Cabinet to Reward Favorites

The Verkhovna Rada Privatization Committee feels sure that the 29th and 30th Compensation Certificate auctions, known for secret Cabinet lists of enterprises, with only two state companies, Finprom (Finance Industry) and Derzhinvest (State Committee on Investment), admitted, will be resumed after the ado surrounding them blows over, since quite a number of compensation vouchers remain unredeemed, are held in powerful hands, and their legitimate life is to end on January 1, 1999. In other words, 49.9% of the shares of this enterprise producing tires for cars, trucks, and farm machinery will be sold not for money but for privatization papers. Getting a 1.6% interest plus one share to have full control over this enterprise will not be difficult; 2.8% interest was previously sold by subscription on preferential terms and 10.33% at certificate auctions. In addition, the SPF plans to put up for sale another 25% block of shares by June 1, 1999, this time subject to commercial bidding.

The remarkable thing is that if these plans come true the next summer will see more than 70% of Valsa shares in private hands and the Cabinet's newly adopted program to "stop production decline and organize its growth" spells it out in the chapter titled "Light and Chemical Industries" - "...material resources worth Hr 6 million (sic) shall be provided from the national reserve to restore the output of automobile tires at Bila Tserkva's VALSA Enterprise." Note: money from the national reserve are to be allocated after most of the shares will no longer be public property and the rest will be awaiting their turn to be sold. Why is the government determined to help this particular enterprise which, by the time this help comes, will not be entirely a state one?

The parliamentary commission has its own suspicions, of which the prevalent one concerns Russian business ("every time Berezovsky visits something is sure to get privatized...") as an established buyer for whom the Valsa privatization program was written), or that it is all because of the other local tire plant, Rosava, which decided to expand and expand its share of domestic and foreign consumer markets. Whatever the reason, the interesting fact remains that the whole affair is not likely to benefit the budget, at least at the privatization stage. SPF head Oleksandr Bondar declared publicly that the final 47th certificate privatization auction will be the best over the years of privatization. Of course it will, offering from December 1 to 30 blocks of shares in 62 monopoly and strategic enterprises at nominal cost.