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Cabinet's Privatization Know-How
Cabinet's Privatization Know-How

The Cabinet of Ministers ordered the State property fund (SPF) to bring into use the system of sale of state share holding in the enterprises together with ground plots, which they occupy. Due to it the government expects to get UAH 1mlrd additionally this year, and UAH 0,5 mlrd in 2007.

It was possible to buy the state enterprise with the ground earlier. But the process was rather difficult. The reason is local self-governments take charge of the ground according to the law though it is considered to be the state property.

According to Sergey Korniets, chief of the department at the SPF department on contests, new scheme of privatization will touch upon enterprises of industry, transport and communication in B and G groups.

The scheme will touch upon those objects which do not take investors' interest. Korniets supposes the opportunity to purchase the ground plot together with long-term assets, where it is located, will increase its investment appeal and price.

"Investor's interest is issue of land relations. If the object together with ground plot is being sold (it touches upon especially objects of unfinished and frozen construction), buyer is often interested in purchase of ground plot, but not the object", Korniets says.

SPF is not ready to announce the list of objects, which will be sold according to this scheme. In general it touches upon objects, which are located in the oblast and district centers. Situation in Kyiv may become the similar.

The State property fund is anxious about problems at the enterprises, where some parts are not the state property while carrying into use new scheme of privatization. Owners of non-control packet of shares can purchase the ground plot and then they will demand overcharge control packet of shares for this ground from the owner.

As Korniets informed, the government foresees only one mechanism – the owner of control packet of shares will have priority right to buy the ground plot in order not to permit these situations. The owner will also get the right to pay the sum in instalments during three years. If he gets a permission of the Finance Ministry, he may pay it for even five years.