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Russia's State Property Privatization Bill Passes Second Reading in Duma

Strategic Insights

— 1 min read

The Russian government has taken a step closer to privatizing state and municipal property with the passing of a bill in the second reading by the State Duma. The legislation aims to regulate the sale of federal property by allowing banks and stock exchanges to sell government assets alongside the Federal Property Management Agency. This move is expected to increase transparency and accessibility in the privatization process, particularly for small and medium-sized businesses.

Key Takeaways:

  • The bill will enable banks and stock exchanges to sell federal property alongside the Federal Property Management Agency, expanding the scope of privatization.
  • Electronic trading will be used as a platform for selling state property, increasing the efficiency and transparency of the process.
  • The bill lowers the upfront required investment to participate in auctions, allowing small and medium-sized businesses to participate.
  • Property can now be sold in an initial public offering under the new legislation.
  • Auctions for state property will no longer have a minimum or standard price, with the starting price determined by a property estimate report.
  • The legislation allows for more flexible pricing and increased competition in the privatization process.
  • Deputy Yekaterina Semyonova expects the new law to attract more participants to the privatization of state enterprises.
  • The Economic Development Ministry aims to raise over 100 billion rubles ($3 billion) by selling stakes in several state enterprises, including Sovkomflot, Rosgosstrakh, and TGK-5.

Statistics:

  • 3,765 federal state unitary enterprises and 3,337 joint-stock companies are owned by the Russian government, according to the state property privatization program for 2010.
  • The Economic Development Ministry hopes to raise over 100 billion rubles ($3 billion) by selling stakes in several state enterprises in 2023.
  • The bill will allow banks and stock exchanges to sell federal property totalizing a higher value in the next year.

Sources:

  • The State Duma's Property Committee statement
  • Deputy Yekaterina Semyonova's statement
  • The state property privatization program for 2010 published on the Federal Property Management Agency's web site
  • Euclid Infotech Pvt. Ltd.

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