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The Russian Ministry of Economic Development Intends to Change the State Property Management System

05.12.12

On November 30, 2012 the Board of the Russian Ministry of Economic Development held a meeting chaired by Minister A.R. Belousov to discuss the issue of improving the quality of state property management.

The main topic for discussion was a draft State Property Management Concept until 2018 prepared by the Russian Ministry of Economic Development in conjunction with the Federal Agency for State Property Management (Rosimushchestvo).

In his opening speech at the meeting, Andrey Belousov noted that at present time the requirements to the state property management system itself have changed. “We have shifted to a qualitatively new privatization scheme”, emphasized the Minister. “If previously we had privatization of comparatively small assets, which gave us an opportunity to transfer them as property complexes, today we sell significant shareholdings in largest companies, that is, we sell market shares, sell certain corporate technologies”. The companies that remain in the state property management system are facing much more strict requirements to corporate governance. These two factors, as the Minister believes, call for a need to restructure the internal organizational and functional model of Rosimushchestvo itself.

The draft State Property Management Concept until 2018 was presented by Deputy Minister, Head of Rosimushchestvo Olga Dergunova. In particular, the Concept contemplates complete liquidation of FGUPs (Federal State Unitary Enterprises) by 2018, increased proportion of shares of companies with state participation traded on the organized securities market, and their gradual doubling by 2018, ensuring publicity of all the companies with state participation that remain in federal ownership, and doubling of land plots involved in economic turnover.

Based on this document, a state program will be prepared intended to define the volume of funds that will be needed in the years to come to improve the state property and privatization system, as well as to optimize the structure of Rosimushchestvo. “The document will be submitted to the Government until December 20 after approval by departments. The state program will be developed until the end of January”, told the Deputy Minister. She also said that the roadmaps (action plans) in respect of the companies that are to be privatized in 2013 will be developed by April 2013.

Commenting on the issue of Rosimushchestvo restructuring, Olga Dergunova noted that the new structure should conform to the goals and objectives of the Concept. For example, a department will be established to deal with large organizations and prepare for privatization of largest companies and enterprises. The objective of information technology development in state property management became, according the Deputy Minister, the reason for this sector to be split off into a separate department within Rosimushchestvo. Another important direction of efforts should be internal control and methodology development, which will be implemented by a new separate department. 

In the course of meeting the attendees discussed the lines of activities of the Russian Ministry of Economic Development and Rosimushchestvo in property relations, as well as the objectives associated with enhancement of the mechanisms to implement the state functions of state property management.

The Board meeting was also attended by representatives of governmental authorities, business and expert communities.

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