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fyi: Kremlin Picks 'Strategic' Enterprises

August 10, 2006

The St. Petersburg Times

MOSCOW - President Vladimir Putin's official web site on Friday published a list of 1,063 enterprises - ranging from regional airports to the state oil pipeline monopoly Transneft - which the Kremlin considers strategically important.

The list was approved by presidential decree on Aug. 4.

The list included 514 enterprises that are wholly state owned, and 549 in which the state owns more than 25 percent.

In addition to Transneft,other enterprises on the list were the Alrosa diamond monopoly, the Gazprom natural gas monopoly, Rosgosstrakh insurance giant, Vneshtorgbank, the defense firm Sukhoi and a number of airports across the country, including in Murmansk, Sochi, Irkutsk, Yekaterinburg and Rostov-on-Don.

Also on the list was the government's 51.17 percent stake in national airline Aeroflot, its 52.68 percent state in United Energy Systems, the Mosfilm film studio, and Rosoboronexport weapons exporter.

The government said the list concerns enterprises that have "strategic significance for ensuring the defense and security of the state, (and) the protection of the morals, the health, rights and legal interests of Russian citizens."

Some of the companies on the list, such as Alrosa and Aeroflot, had previously been cited as possible targets for privatization.

But their inclusion on the list does not mean that their privatization is now "forbidden," said Arkady Dvorkovich, head of the presidential administration's Department of Experts.

"What this means is that any transactions involving these companies' shares would need to be approved by the president," he was quoted by RIA-Novosti as saying.

Every year, Russia privatizes a number of state-owned or state-controlled enterprises. Next year, about 1,324 enterprises are expected to be sold, Itar-Tass reported. Additionally, the state plans to sell about 566 share packets that it owns in various firms. In late July Economic Development and Trade Minister German Gref said the government was likely to sell its shares in several companies including Aeroflot and Svyazinvest, as well as in several ports, but added that the final decision would be made by October.

http://www.sptimesrussia.com/index.php?action_id=2&story_id=1255