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Privatization agency struggle continues
Journal Staff Report

KIEV, May 4 Prime Minister Yulia Tymoshenkos struggle over control of Ukraines privatization effort has heated up, with both her and President Viktor Yushchenko using hostile moves seeking to override each other in order to appoint a loyalist as the head of the State Property Fund.

Tymoshenkos government on April 24 won a district administrative court ruling that had suspended indefinitely a Yushchenko decree that had been aimed at stopping the reshuffle at the SPF.

Armed with the ruling, Tymoshenko on April 25 personally sought to overcome tight security at the SPF to announce the appointment of Andriy Portnov, her loyalist, as the acting head of the SPF.

But after security guards loyal to the president refused to recognize the appointment, Tymoshenko relocated Portnovs office to the Cabinet of Ministers main building, blocks away from the SPF.

The latest developments also raise questions over who is actually in charge of the countrys privatization agency ahead of the sell-off of state assets that may fetch billions of dollars to state coffers.

Valentyna Semeniuk, the head of the SPF, with the help of Yushchenkos security guards, has apparently maintained control over the SPF offices. She also apparently maintains control over the agencys official stamp.

But Portnov, speaking out of his office at the Cabinet of Ministers, said most of SPF staff and heads of regional branches had pledged their allegiance to him. Portnov apparently also controls SPFs bank accounts.

The developments comes as Tymoshenko has been desperately seeking an influx of billions of hryvnias from selling state assets as her massive populist spending campaign has been running out of cash.

Ivan Kyrylenko, the leader of Tymoshenkos group in Parliament, said the government had been facing a 9-billion-hryvnia shortfall in budget revenue so far this year, calling for the quick state property sell-off.

Tymoshenko managed to build up her rating over the past four months after announcing her plan to clear more than 100 billion hryvnias in failed Soviet-era bank deposits to millions of people.

The plan, however, also boosted inflation to the highest level over the past seven years and had been now posing a serious threat to the economy, analysts said.

Tymoshenkos failure to deliver on the deposit bailout plan would probably undermine her rating ahead of crucial presidential election next year, analysts said.

Meanwhile, the district court on April 24 ruling also suspended Yushchenkos decree that had sought to stop privatization of Odessa Portside Plant, a major producer and exporter of ammonia and mineral fertilizers.

Tymoshenko and Yushchenko clashed publicly over this sell-off, which the government hopes would raise up to $1 billion, or up to 5 billion hryvnias, to state coffers.

The government now seeks to hold an auction selling the plant between May 20 and May 25.

The plant is too attractive for investors not to join the privatization, Portnov recently told Ukrayinska Pravda online newspaper. The main contenders have already agreed to participate in the auction disregarding the conflict between the authorities. (tl/ez)

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USD 26.23 26.23
RUR 0.421 0.422
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