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year, NBU deputy governor Kateryna Roshkova commented. Last year, the NBU planned to distribute to the state budget UAH22.63bn of its 2020 profit in 2021. At the same time, the law on the 2021 state budget stipulates that the NBU would contribute UAH33.0bn of its profit to the government.
This will be the smallest NBU payment to the state budget in the last five years (in 2016-2019, the NBU paid UAH43-69bn), which will result in the budget’s revenues under-performing by UAH8.57bn (or by 0.8%). The smaller than budgeted payment is an expected event, taking into account that the NBU’s top management stated many times its expected contribution. Interestingly, the NBU’s payment to the budget will be smaller this year than the budget’s payments to the NBU (over UAH40bn in interest and principal on state bonds).
6.1.4 Budget dynamics - privatization
Ukraine’s goal of quadrupling revenues from the sale of state companies this year “is entirely realistic,” wrote Dmytro Sennychenko, the Head of the State Property Fund, in an Atlantic Council blog:
“Ukraine moves closer to large-scale privatization breakthrough.” The $430mn goal will be met through the sale of “blue chip assets:” United Mining and Chemical Company, the President Hotel and six regional power distribution companies, or oblenergos. Sixteen companies – “mostly from abroad” – are interested in United Mining and Chemical, which mines titanium-zircon deposits and produces rutile, ilmenite and zircon concentrate.
During the first quarter, the State Property Fund conducted 377 privatization auctions, raising $36mn for the Treasury. By July 1, the Fund plans to complete the sale of all 40 properties of Ukrspirt, the former state alcohol monopoly producer.
On March 30, the Parliament adopted draft law No.4543 on unblocking the process of large-scale privatization, namely objects that are evaluated for more than UAH250mn. Thus, the State Property Fund is preparing for privatization of 5 thermal power plants, 3 regional power plants, the enterprise Bilshovyk, Odesa Port Plant, the United Mining and Chemical Company, the President Hotel, etc. In 2021, the Government plans to receive UAH12bn from the sale of these assets.
In a surprise result, the Rada failed on April 14 to repeal the law unblocking large-scale privatization. Only 49 of the needed 226 deputies voted in favour of selling state companies estimated to be worth more than $10bn. Oddly, the Rada voted for the bill on March 30. Large state companies generally lose money, largely due to thievery by management.
Bolshevik, the oldest machine building plant in Kyiv, will probably be sold for the value of its 35 hectares of prime real estate, predicts Dmytro Sennychenko, head of the State Property Fund. Founded 140 years ago by a Swiss engineer, the state-owned factory has fallen on hard times, with production dwindling and bushes growing out of rooves. But, for a developer, the location is gold: fronting on Peremohy, Kyiv’s 10-lane access highway from the west, Bolshevik is next to the Shuliavska metro station and near the Zoo, two parks and Kyiv Polytechnic Institute. Sennychenko predicts earnings from
40 UKRAINE Country Report May 2021 www.intellinews.com