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Russia to delay privatisation plans again - report

By: | at 08:13 AM | International Trade  

Russia is putting off the planned privatisation of three companies this year, a government minister was quoted as saying on Monday, the latest delay in a programme increasingly held hostage by economic uncertainty linked to the crisis in Ukraine.

With the dollar-denominated RTS share index down about 5 percent and the rouble down 4.3 percent on the year, weakened by Western sanctions over Russia’s annexation of Crimea, the government has moved away from earlier deadlines to privatise companies such as Rostelecom.

“We expect a significant decline in revenues from privatisation, to 170.8 billion roubles ($5 billion),” RIA news agency quoted Deputy Finance Minister Tatyana Nesterenko as saying.

The government had hoped to raise 200 billion roubles by selling stakes in state companies this year.

“We checked the estimate for the planned sale of shares in Rostelecom, (shipping company) Sovkomflot and the Novorossiisk sea port. Based on the uncertain value, the government decided not to sell these shares this year,” Nesterenko said.

Launched in 2010 by then-finance minister Alexei Kudrin, the privatisation drive to reduce the state’s direct role in the economy and improve a much-criticised investment climate has been dogged by delays.

Assets have been removed from the lists, prey to a tug-of-war between more liberal-minded politicians and hardliners favouring a slower approach to privatisation. Market volatility has been exacerbated by the crisis over Ukraine, where pro-Russian separatists and government forces are fighting in the east.

Russia’s state property management agency has said the state may sell stakes in airline Aeroflot and oil major Rosneft, but the latter faces objections from its CEO Igor Sechin.