of September 17, 2008 No. 518
About the Privatization program of state-owned property in the Kyrgyz Republic for 2008-2012
According to the Law of the Kyrgyz Republic "About privatization of state-owned property in the Kyrgyz Republic", the statement of the President of the Kyrgyz Republic, turned to Jogorku Kenesh of the Kyrgyz Republic and the Government of the Kyrgyz Republic of January 10, 2008, the minutes of the Coordination center for strategic management of the Kyrgyz Republic of July 11, 2008, for the purpose of further development of the organized market of corporate securities the Government of the Kyrgyz Republic decides:
1. Approve the enclosed Privatization program of state-owned property in the Kyrgyz Republic for 2008-2012.
2. Recognize to invalid:
- the order of the Government of the Kyrgyz Republic of October 25, 1999 No. 575 "About realization of the state share fraction of joint-stock companies on the Kyrgyz Stock Exchange";
- the order of the Government of the Kyrgyz Republic of September 30, 2000 No. 382-r;
- the order of the Government of the Kyrgyz Republic of December 15, 2000 No. 461-r;
- the order of the Government of the Kyrgyz Republic of March 15, 2004 No. 153-r.
3. To impose control over the implementation of this resolution on department of economy, trade, tourism and entrepreneurship of Government office of the Kyrgyz Republic.
Prime Minister I. Chudinov
Approved by the Order of the Government of the Kyrgyz Republic of September 17, 2008 No. 518
Privatization is integral part of the state policy directed to change of pattern of ownership, structure of the economic relations and creation of competitive environment. Process of reforming of state-owned property began in 1991 and took place several stages. At certain stage of privatization the priority was given to the different directions depending on the tasks set for this or that period.
Questions of privatization and management of state-owned property, increases in their efficiency, systematization of developments of estimative activities and bankruptcy, and also questions of attraction of direct investments, improvements of management of the privatized companies were the main.
In the course of privatization the basis for forming and development of the domestic stock market, small and medium entrepreneurship is created, market infrastructure in which all basic elements necessary for its effective functioning and development are provided is created conditions for attraction in economy of the republic of foreign and domestic investors are created. The state transferred part of the functions on management of the companies to private owners.
Strategy and tactics of privatization changed. It was expressed in decrease in its rates as time of privatization of industries, strategically important for economy of the republic, the large industrial enterprises and associations constituting basis of national wealth came. Now the largest shareholder having controlling stocks in the companies of the specified sectors is the state.
At the same time, as shows the analysis of last stages of privatization, the privatization which is carried out as change of pattern of ownership, sometimes does not give the expected results. Along with change of pattern of ownership it is necessary to solve big circle of problems on macro - and microeconomic levels.
For the purpose of the solution of objectives with transition to the next stage of privatization the new policy of the state aimed at quality of process of privatization is developed. Process of privatization of state property in the Kyrgyz Republic is implemented on the basis of the medium-term Privatization program of state-owned property which is one of the main component of economic strategy of the state. For 1991-2007 seven privatization programs were adopted, each of which was performed taking into account the accumulated experience and conclusions from the previous stages of privatization.
In spite of the fact that more than 70 percent of the former state-owned property are already transformed to objects with non-state pattern of ownership, there is still large volume of work on further reform of objects of state-owned property.
Main objectives of state policy in the field of privatization of state-owned property for the medium term is:
- strengthening of private property institution, stimulation of entrepreneurship through privatization of state-owned property, population employment increase;
- assistance to development and effective functioning of the security market which shall become the most important instrument of accumulation of investments;
- improvement of financial and economic indicators of activities of the state companies, legal entities with participation of the state;
- reduction of load of the budget, increase in state revenues and receipt of funds in the state treasury according to the Privatization program of state-owned property.
For implementation of the specified purposes in the field of privatization it is necessary to solve the following main objectives:
- completion of the privatization of objects begun at the previous stages taking into account real market demand;
- privatization of the companies of strategic industries of economy;
- increase in investment appeal of the companies, activation of work on the organization of investment tenders for the purpose of search of the effective owners, investment attraction necessary for production, technology and social development of the privatized companies;
- carrying out restructuring of the companies, reorganization of low profitable enterprises;
- drawing into economic circulation of idle property;
- implementation of the advanced modern methods of management of the state assets;
- enhancement of the legislation on privatization and management of state-owned property, bankruptcy and estimative activities taking into account the changing economic conditions.
3.1. Objects which privatization is prohibited:
3.1.1. water resources, airspace;
3.1.2. the natural territories, including objects of forestry having the status of national reserves, wildlife areas, natural parks, the special biospheric territories protected or used in a special way;
3.1.3. objects of historical and cultural heritage;
3.1.4. archive documents of the state part of National Archive Fund of the Kyrgyz Republic, public archive institutions;
3.1.5. means of the government budget and currency reserve of the Kyrgyz Republic, Social fund of the Kyrgyz Republic, other state funds, and also gold stock;
3.1.6. National Bank of the Kyrgyz Republic and Central Treasury of the Ministry of Finance of the Kyrgyz Republic;
3.1.7. organizations and the organizations, military equipment and the equipment which are in the operational management of the Ministry of Defence of the Kyrgyz Republic, the State committee of homeland security of the Kyrgyz Republic, the Ministry of emergency situations of the Kyrgyz Republic, the Ministry of Internal Affairs of the Kyrgyz Republic, other ministries and departments having the military forming corresponding to their direct functions, objects of Civil defense;
3.1.8. organizations and organizations subordinated to National Statistical Committee of the Kyrgyz Republic;
3.1.9. the organizations and the organizations which are a part of the system of the State agency on registration of the rights to real estate under the Government of the Kyrgyz Republic;
3.1.10. the companies and the organizations of hydrometeorological service, control services behind condition of the environment and conservation;
3.1.11. companies and organizations of sanitary and epidemiologic, quarantine services of the Kyrgyz Republic, remedies of plants;
3.1.12. the organizations of health care having the status of the national; the healthcare institutions providing separate types of the medical and sanitary help and being single in this territory; maternity hospitals; organizations of maternity welfare and childhood; stations of ambulance and centers of blood; donor centers; research institutions; national, scientific and republican medical centers; the scientific and production associations, the organizations rendering stationary services of general profile (the territorial, joint regional, city hospitals); centers of family medicine and group of family doctors; medical and obstetrical centers; rehabilitation centers; organizations of forensic medical examination, pathoanatomical bureaus; service premises and objects of bodies of the state veterinary science;
3.1.13. organizations on prevention and treatment of mental, cardiological, endocrinological, psychoneurological, infectious and skin and venereologic diseases, tuberculosis, the oncological, narcological patients infected with HIV and patients with AIDS;
3.1.14. organizations of system of social protection of the population: orphanages, children's homes, houses nursing homes for handicapped children; nursing home and disabled people; nursing homes; hospital; sanatoria and boarding houses for disabled people, children and aged; boarding schools for orphan children and children without parental support; boarding schools for children with shortcomings of intellectual and physical development;
3.1.15. objects and equipment for burial of solid industrial and household waste, solid and liquid radioactive waste; cattle mortuaries;
3.1.16. cemeteries;
3.1.17. the state and mobilization reserves (in case of privatization of the state companies are subject to exception of structure of their property);
3.1.18. objects on gold refining;
3.1.19. objects and cultural institutions and the arts having the special public importance, the Kyrgyz state circus, the National film studio Kyrgyzfilm of T. Okeev, State film video fund and also their legal successors;
3.1.20. the objects of water management and meliorative systems providing servicing and operation of water storage basins, main water utilities, water-pumping points;
3.1.21. the companies making spirit products;
3.1.22. highways;
3.1.23. the specialized road and operational enterprises of the Ministry of Transport and Communications of the Kyrgyz Republic providing servicing and operation of highways, bridges and tunnels public;
3.1.24. objects of engineering infrastructure: networks of water supply (except for the water supply systems which are in rural settlements) and sewerages;
3.1.25. bodies of scientific and technical information; the scientific and scientific and technical libraries providing the collection, processing, storage and use of the state information resource of scientific and technical development of Kyrgyzstan, and also the objects creating or providing insurance fund of technical documentation;
3.1.26. research institutions, laboratories, stations, scientific and research and production centers subordinated to National academy of Sciences of the Kyrgyz Republic;
3.1.27. state seed inspections, soil and agrochemical and seed-trial stations of crops;
3.1.28. child care preschool and out-of-school facilities of all types and names, comprehensive schools, educational institutions of primary and secondary professional education, Kyrgyz Academy of Education, National military lyceum, National computer gymnasium, Art boarding school;
3.1.29. the public higher educational institutions which entered the list of the state higher educational institutions of republican and regional value financed from the government budget;
3.1.30. property complexes of the state governing bodies except for exempted and used not directly in case of structural changes.
3.2. Objects which shall remain in property of the state:
3.2.1. the objects specified in appendix No. 1 to this Program.
3.3. Objects which privatization is performed according to the concepts and programs approved by Jogorku Kenesh of the Kyrgyz Republic:
3.3.1. main railroads, trunk gas pipelines, national power grid, hydroelectric power stations (cascade of the Naryn hydroelectric power stations);
3.3.2. the objects specified in appendix No. 2 to this Program.
3.4. Objects which privatization is performed in accordance with the established procedure:
3.4.1. the objects specified in appendices No. 3 and No. 4 to this Program.
4.1. Choice of method of privatization
The choice of method of privatization is performed by authorized state body on privatization and management of state-owned property depending on subject to privatization.
The method of privatization of strategic objects of the Kyrgyz Republic is established by the decision of the Government of the Kyrgyz Republic.
Treat methods of privatization:
- sale at auction;
- sale at tender;
- transfer to management with the subsequent redemption;
- transfer to lease with the subsequent redemption;
- introduction as contribution to the authorized capital of economic partnerships and societies.
In case of impossibility of sale of subject to privatization by any of the listed above methods and due to the lack of demand, the method of direct sale can be applied.
The choice of method of privatization is performed on the basis of inspection and the analysis of financial and economic condition of subject to privatization, taking into account its specific, industry, regional and other features, and also perspectives of further development. Specific terms of privatization of objects are determined by authorized state body by privatization and management of state-owned property, proceeding from market situation.
If the state company needs any reorganization before its privatization, the authorized state body on privatization and management of state-owned property can make the decision on carrying out reorganization (merge, accession, separation, allocation, transformation) of the state company.
The most acceptable form of privatization for large and medium scale enterprises and organizations is their transformation to open joint stock companies with the subsequent implementation of the state block of shares.
4.2. Application of methods of privatization
Conditions and procedure for application of sales method at auction, tender, direct sale, transfer to management with the subsequent redemption and transfers to lease with the subsequent redemption of state-owned property are regulated by the provisions approved by the Government of the Kyrgyz Republic.
In case of impossibility of implementation of the state blocks of shares at auction or the stock market if in joint-stock company the state share constitutes from 5 to 25 percent, sale of small illiquid blocks of shares to workers and/or shareholders at the price established under organization (the placement price) can be provided and if the state share constitutes 5 and less percent - at the price equal to half of nominal value. It will provide acceleration of implementation of shares, not best-selling because of their small share in the authorized capital, and further free redistribution of the property rights.
In case of introduction of state-owned property as contribution to the authorized capital of economic partnerships and the societies Government of the Kyrgyz Republic can make the decision on introduction as contribution overdue bad debt according to dividends strategically or the socially important companies which bankruptcy cannot be allowed from state interests. As contribution to the authorized capital of economic partnerships and societies in the absence of legislative restrictions the cost of the parcel of land on which the company including which is earlier privatized is located can be brought if as a result of the committed transaction the site remained in state-owned property and the company did not become the owner of the property right to it.
In exceptional cases, for preserving territorial integrity, providing single production cycle and support, the objects of state-owned property which are in the territory of joint-stock company and being its integral and inseparable part are implemented to joint-stock company.
4.3. Privatization of the state blocks of shares in the security market
Implementation of the stocks of joint-stock companies owned by the state can be carried out by methods of auction and direct sale through the licensed organizer of trade in the security market.
Objects and the sizes of their state blocks of shares realized in the security market are determined by authorized state body by privatization and management of state-owned property.
Objects of strategic importance and the sizes of their state blocks of shares realized in the security market are determined by the Government of the Kyrgyz Republic.
The procedure of implementation of the state block of shares is performed according to the provisions regulating conditions and procedure for sale of state-owned property by methods of auction and direct sale, and also internal documents of the organizer of trade in the security market (Rules of stock exchange trading). The authorized state body on privatization and management of state-owned property realizes the state blocks of shares through the predstavitelyaprofessionalny member of the security market performing broker activities (broker). The agreement in which the price of the state block of shares, tendering terms, cross liabilities of the parties and other conditions are determined is signed with the broker.
The sales charge over selling price (amount of transaction) of the state block of shares is levied from the buyer.
In case of privatization of the state block of shares in the stock market one of the directions is passing by joint-stock companies (issuers) of the procedure of listing.
Listing is procedure of inclusion of securities in the special list of stock exchange (Quoted leaf of the exchange) which correspond to the special criteria established by stock exchange.
Inclusion of securities of the issuer in the Quoted leaf of the exchange improves indicators of profitability, reliability and liquidity of security. For the issuer passing of listing means increase in investment appeal and transparency of the company, use of the mechanism of attraction of the capital through the stock market and implementation of the best principles of corporate management.
4.4. Privatization conditions
Conditions of privatization are established depending on privatization method.
One of the main conditions of competitive privatization for medium and large enterprises is submission of business plans on development of the companies.
Serve as criteria for evaluation of offers on their privatization:
- the amount of the offered investments, and preference is given to the largest and long-term investment offers;
- the price offered by buyers;
- social obligations in the field of the employment level, orders objects of the social sphere;
- exit to the new markets and/or expansion of existing;
- development of release of new competitive and/or import-substituting products;
- implementation of new management, advanced training of personnel;
- preserving profile.
Depending on type of the companies priority of criteria is established, they can be changed or added.
Privatization of the main railroads, trunk gas pipelines, national power grid, hydroelectric power stations (the cascade of the Naryn hydroelectric power stations) is performed according to the programs approved by Jogorku Kenesh of the Kyrgyz Republic.
The method of privatization of strategic objects of the Kyrgyz Republic is established by the decision of the Government of the Kyrgyz Republic.
In the course of privatization of strategically important objects the authorized state body on privatization and management of state-owned property if necessary requests in authorized body on homeland security of the Kyrgyz Republic information for studying concerning the subjects who submitted applications for participation in privatization. The authorized body on homeland security of the Kyrgyz Republic shall provide timely the corresponding conclusion about the potential buyer.
Questions of privatization not completed by construction of facilities, being in state-owned property, are solved authorized state body on privatization and management of state-owned property in the procedure established by the Government of the Kyrgyz Republic.
The main methods of their sale are the auction, tender. In case of impossibility of sale by the listed methods object can be (in the absence of any restrictions) is sold under disassembly without conditions of building and without the right of registration of the parcel of land, i.e. the buyer sorts the object which is not completed by construction for use of construction materials and other property, clearing away and arranging well the parcel of land which then is transferred to relevant organs.
The cost of subjects to privatization is determined according to requirements of the legislation of the Kyrgyz Republic.
Evaluating is performed according to the regulatory legal acts approved by the Government of the Kyrgyz Republic.
The commission on privatization has the right to involve auditing, consulting, estimative, expert and other organizations which bear responsibility for reliability and justification of the carried-out works according to the legislation of the Kyrgyz Republic.
Important link in privatization is tracking of full implementation by the new owner of conditions of the concluded bargains. For this purpose requirements to creation and the conclusion of purchase and sale agreements of the privatized objects with the subsequent tough control shall be observed. In the purchase and sale agreement of object all obligations of the buyer and the sanction for breach of agreement make a reservation. The procedure for introduction of investments is reflected with their distribution by years.
In case of failure to carry out by the buyer of the agreement obligations of purchase and sale, the seller has the right to require agreement cancelation of purchase and sale, compensation of the caused damage and lost profit according to the procedure, established by the legislation of the Kyrgyz Republic.
Changes can be made to the purchase and sale agreements signed in case of privatization in the consent of the parties. At the same time, changes cannot provide: easing of responsibility of the buyer for failure to carry out of the undertaken obligations by it; reducings total amount of the investments defined by the purchase and sale agreement; reduction of selling price of property.
By results of checks of accomplishment of conditions of purchase and sale agreements statements of checks are drawn up. The buyer of subject to privatization shall represent to authorized state body on privatization and the management of state-owned property which signed the purchase and sale agreement, information in amount and in the terms stipulated by the purchase and sale agreement.
Following the results of accomplishment of this Program receipt of money of about 600 million som is expected (without strategic objects).
The authorized state body on privatization and management of state-owned property together with the interested bodies develops the regulatory legal acts necessary for accomplishment of this Program.
Due to the long-term nature of action of the Program, as required, changes and additions in accordance with the established procedure can be made to it.
Information on privatization and results of transactions on privatization of state-owned property is published by authorized state body on privatization and management of state-owned property in mass media in accordance with the established procedure.
Action of this Program is performed during 2008-2012 and until approval of the Privatization program of state-owned property in the Kyrgyz Republic for the next period.
to the Privatization program of state-owned property in the Kyrgyz Republic for 2008-2012
The list of objects which shall remain in property of the state
|
№ of payment order |
Name of object |
Authorized capital (one thousand som) |
Number of the shares which are in state property (%) |
The ministries, the state committees, administrative departments supervising questions of data of the state companies, joint-stock companies and other objects |
|
1 |
2 |
3 |
4 |
5 |
|
1 |
JSC Settlement Savings Company |
316220,000 |
100 |
Ministry of Finance of the Kyrgyz Republic |
|
2 |
JSC Natsionalnaya elektricheskaya set Kyrgyzstana |
1597377,300 |
80,49 |
Ministry of Industry, Energy and Fuel Resources of the Kyrgyz Republic |
|
3 |
JSC Elektricheskiye stantsii |
4428282,900 |
80,49 |
Ministry of Industry, Energy and Fuel Resources of the Kyrgyz Republic |
|
3-1 |
JSC Kyrgyzsuudolboor |
2481,9 |
51,0 |
State committee of the Kyrgyz Republic on water economy and melioration |
|
3-2 |
JSC Kyrgyzstan Airline |
500,000 |
100 |
Ministry of Transport and Communications of the Kyrgyz Republic |
|
4 |
JSC International Airport Manas |
497217,7 |
79,05 |
Ministry of Transport and Communications of the Kyrgyz Republic |
|
5 |
State company "Kyrgyzaeronavigation" |
- |
- |
Ministry of Transport and Communications of the Kyrgyz Republic |
|
6 |
Public institution "Kyrgyz experimental biofactory" |
- |
- |
Ministry of Agriculture, Water Resources and Processing Industry of the Kyrgyz Republic |
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The document ceased to be valid according to the Order of the Government of the Kyrgyz Republic of February 22, 2012 No. 143