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European Bank completes first privatisations in Moscow
The European Bank for Reconstruction and Development has completed the first phase of a comprehensive technical assistance programme on privatization for the City of Moscow. The resulting Action Plan was adopted by the Government of the City of Moscow.
The Plan represents a technical plan for joint work to fulfil the objectives approved by the Government of the City of Moscow in "The Main Guidelines of the Programme for Privatization in Moscow for 1992". The Government of Moscow has asked the European Bank to assist in mobilising external finance for technical assistance based on this Action Plan.
Under this Plan, the City of Moscow will sell a number of major hotels by international tender. At the same time it will prepare the privatization of other major enterprises. Businesses in key sectors of the city's economy will be sold or restructured.
The European Bank has developed its action plan on the basis of the privatizations it has carried out over seven months in Moscow. This included two pilot privatizations of medium sized manufacturing enterprises carried out together with Moscow State Property Agency (Moskomimushchestvo).
The first privatized enterprise is Diapazon, a manufacturer of consumer plastic products with 850 employees. The second is Moscow Gelatine Factory, with 535 employees. "The Bank has adopted a practical approach aimed at achieving rapid, transparent and effective privatization", said Charles Vuylsteke, Head of Privatization at the Bank.
In preparation of the Plan, the European Bank has also gathered data on 5,000 enterprises in Moscow. It has prepared a detailed and practical privatization manual and has begun training Moscomimushchestvo staff.
"The work done by the Bank on the privatisation for the City of Moscow, is part of a much broader effort of the Bank to develop workable and transparent methods of privatisation on the basis of successful pilot transactions", said Vuylsteke. "A similar approach is developed in the City of St Petersburg. The Bank is also supporting the Russian Federation on its overall programme of privatisation, in a joint effort with the European Commission and the World Bank Group." The work of the Bank in Moscow is partly funded by the European Commission and the British Know How Fund.
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