The government prepares to sell oil infrastructure
First Vice-Prime Minister of Belarus Vladimir Semashko voiced willingness of the authorities to sell pipelines, following the sale of gas transport enterprise Beltransgaz to Russian Gazprom in 2011.
Prime Minister of Belarus Mikhail Myasnikovich coordinated with President Lukashenko a list of strategic enterprises to be put on sale in 2012 to provide for USD 2.5 billion from privatization in order to meet Belarus’ commitments within the ACF of the EurAsEC lending program, said the Head of the State Property Committee of Belarus Georgy Kuznetsov.
The government continues the intrigue with the privatization list-2012 attempting to stir up interest of the investors. At the same time, the Head of the State Property Committee said he “still has not seen the final version of the list, that the list was incomplete and could be amended”. Therefore neither Economy Ministry, nor the Council of Ministers are the main authors of the list and as a consequence, have any authority regarding privatization. According to Kuznetsov, there are 19 enterprises on the list with a book value of about Br 7 trillion (about $ 850 million). However, the enterprises will be privatized for their market value.
Kuznetsov refused to name companies appearing in the list, saying only that “it included strategic and liquid companies of Belneftekhim and of the Ministry of Industry”. Kuznetsov acknowledged that while compiling the list they faced with opposition from almost all Belarusian ministries. It also describes the attitude towards the privatization of directors of enterprises, local and central authorities. Even if the decision to sell an enterprise is made, the investor may face with hidden resistance and sabotage from the directorate and the relevant agencies (which is usually the case). Accordingly, in order to protect own interests, the investor will have to seek for protection and support at the highest political level.
Non-official sources say that the list includes the most liquid strategic enterprises of the country: Novopolotsk refinery, MAZ, BelAZ, MTS, oil pipelines, two breweries and Paritetbank. That is, the list contains assets that could be prepared for sale quickly.
The fact that the government is considering selling Druzhba pipeline has been confirmed by Vladimir Semashko. Deputy Prime Minister announced that the Government was assessing the effectiveness of the Belarusian oil pipelines and considering their further use or sale. Mr. Semashko said, the Belarusian oil pipelines had aging service life and some were not used at all, and noted that “we must remember about BTS, the BTS-2”. Semashko also said that the Government was negotiating with various buyers interested in purchasing Belarusian oil pipelines. Pipeline transportation is one of the most profitable industries of the Belarusian economy. For example, an enterprise “Gomel Friendship” is the fifth on a list of the most profitable companies during the first three quarters of 2011 with a margin of more than 50% (in foreign currency).
Therefore we have been proved right, saying that the privatization would be “targeted” i.e. strategic or profitable small businesses will be sold only to fulfill the obligations and to cover the current needs in the foreign currency (USD 2.5 billion or so, based on the needs, for instance, on the decision to increase salaries of public officials and/or state employees).
Most exclusively the buyers will be Russian private and public companies, as Russia now has sufficient leverage to cut off any other potential investors and ensure protection of their interests. At the same time, the row with the largest Russian private investor “Itera” (Alexander Lukashenko ordered to terminate the contract with them) shows the level of protection of investors, including Russian ones.
President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.
President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.
The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.
The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.
The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.