The government prepares to sell oil infrastructure

Category status:
April 22, 2016 18:05

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.

Similar articles

Belarusian and Ukrainian Defence Ministries entangle in confrontation spiral
October 02, 2017 11:57
Фото: RFRM

Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.

The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.

Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.

For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.

Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.

The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.

Recent trends

cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china