Page 26 - bne IntelliNews Country Report: Iran Dec17

He added: “If we had properly cut the programme’s top-earning claimants two years back, we could have added IRR120tn ($3bn) to the government coffers and development budget annually.”
Earlier last year, the Majlis (parliament) said it was looking to slash 24mn people from the subsidy scheme, however much of the plan was scaled back as it was seen as a sensitive subject due to people’s low spending power.
The initial reason for the launch of the scheme was to subsidise utility bills for low-income households, but it was quickly seen as a costly failed policy due to a lack of oversight.
According to recent figures released by the government, some 4.8mn people have been removed from the scheme in the past 12 months.
6.1.3 Budget dynamics - funding, privatization
The Privatization Organization of Iran has announced it is to tender stakes in four state-owned firms, Tasnim News Agency's Persian language service reported on July 2.
The Rouhani administration has announced that is seeking to attract "real private investors" for companies after several years of the government relinquishing parcels of ownership to state-backed organisations like semi-private pension and insurance companies.
According to the announcement, the tender includes a 95% stake in the East Alborz Mining Company , with 319mn shares priced at IRR1,566 ($0.04).
The second firm set for part-privatisation, Iran Helicopter Company , is set to make available 15mn shares (33.54%) priced at IRR29,429 ($0,78), while the third company Mashin Sazi Lorestan , a producer of equipment for the oil industry, is set to offer 129mn shares (94.96%) priced at IRR447 ($0.01).
The final company on the sales block is INDRO LANDRA Industrial Group, is a subsidiary of an Iranian state industrial firm and a joint venture with Italy’s LANDRA automotive engineering group. IDRO LANDRA will release 7mn shares (37.17%) to investors priced at IRR348 ($0.009).
Many of Iran’s industrial firms in recent years have seen their business collapse due to mismanagement and sanctions throttling development. Investment and research and development have been other areas where companies have failed to adapt to changing market conditions.
President Hassan Rouhani has expressed a will to relinquish control of many underperforming companies to the private sector and potential foreign investors.
According to official reports, since 2013 the Iranian government has increased the selling off of state assets by a rate of 40% compared to the previous Ahmadinejad administration that held sway between 2005 and 2013.
26 IRAN Country Report November 2017 www.intellinews.com