By Vladimir V. Sytin
Recently, the State Property Fund of Ukraine has sold blocking stakes in three energy companies, namely DonetskOblEnergo, ZapadOblEnergo and KievEnergo by exchange auctions. All blocks of shares were acquired by the limited liability company Ornex of Cyprus, which is incorporated in the System Capital Management Group controlled by Ukrainian industrial magnate Rinat Akhmetov. As a result, DonetskOblEnergo, ZapadOblEnergo and KievEnergo are respectively 96.5%, 97.2% and 97.4% owned by Akhmetov's companies today.
According to many observers, Kiev authorities' assurances to return KievEnergo to communal ownership turned out to be worthless. At present, privatization in Ukraine is the way that bureaucrats can reward tycoons and cronies by giving them valuable public resources for a low price. As a rule, this deregulation entails high prices and poor services, whereas private owners would not move a finger to build new power plants or mend power networks, but milk very hard-pressed Ukrainian taxpayers of their cash.
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