Lobbying hampering privatization in Russia – Medvedev

MOSCOW. June 27 (Interfax) – The chronic non-fulfillment of privatization plans in Russia is related not just to the market situation but to lobbying also, Russian Prime Minister Dmitry Medvedev said at Thursday’s Cabinet meeting, which discussed a truncated version of the privatization program.

“Let’s be honest, this also has something to do with the energy of lobbying by selected ministries and officials, who are often willing to go to any length to prevent a sale and lose control of property. This isn’t right. The state has to have as much as it needs for its current purposes,” Medvedev said.

Medvedev reiterated that “privatization does not have only fiscal aims” but is “also a pointer to the sort of economy that we want to build.”

“Privatization is a general task and an ideological issue for the government,” he said.

Economic Development Minister Alexei Ulyukayev said the government planned to sell 1.7 trillion rubles worth of stock in companies in 2014-2016.

He said some of the proceeds would be used to develop the companies themselves and bolster their capital, and that the federal budget would receive around 1 trillion rubles, including: 620 billion rubles from the sale of shares (180 billion rubles in 2014, 140 billion rubles in 2015 and 300 billion rubles in 2016) plus funds in the form of dividends from the state company Rosneftegaz. The sale of smaller companies could raise another 9 billion rubles.

Finance Minister Anton Siluanov said he doubted the budget would raise 1 trillion rubles from privatization in 2014-2016. The draft three-year budget only projects 925 billion rubles and the approved privatization program 620 billion rubles, plus 380 billion rubles in Rosneftegaz dividends. “So far I see a risk in the 380 billion rubles from Rosneftegaz as we don’t yet see these resources at the company in our forecasts,” Siluanov said.

First Deputy Prime Minister Igor Shuvalov said “although in the legal sense this is termed dividends, this is still a privatization deal (the money will come from the sale of shares in Rosneft (RTS: ROSN)). “If the sale of the Rosneft shares goes ahead, we’ll get the money via dividends. It’s just the same as what we got from the sale of shares in Sberbank (RTS: SBER) via Central Bank profit,” he said.