We live in a time of fundamental break
(Continued from Title page)
The Day: Mr. Bondar, clouds seem to be gathering around you. What do you personally think is the reason and can this have any unpleasant consequences?
O.B.: They have been after me before and they will keep trying. I know every single one of them. Just as I know what they say about the report I am to make in Parliament. There is talk about my being replaced. My job [as head of the State Property Fund - Ed.] is anything but boring and has always drawn public attention. Early this year I was shown a letter addressed to Viktor Yushchenko from the Green fraction, proposing Oleksandr Riabchenko as my replacement. And this was an official document, mind you. Its absurdity is that Bondar is still in office and no one has formally raised the issue of his dismissal. Actually, it would take freer politicians to comment on such things.
The Day: Fine, but you will recall an interview with Den when you stated that you are the President’s man and that Leonid Kuchma proposed the Verkhovna Rada your candidacy and backed it, so that you have no moral right to say that you are a self-made man, that no one has helped. Has anything changed in your business relationships or the attitude toward you as head of an institution with special jurisdiction?
O.B.: Our professional relationship has always been normal and effective. This hasn’t changed. And I can still say that I am the President’s man, just as I know that I will continue in my post if the President wishes it. And that I will lose my job if he doesn’t. Basically everything depends on him and on the results of my work, of course. If worst comes to worst, I will not oppose it. As for the results of my work, I can’t say that I am afraid to deliver my report in Parliament, although the situation is hard on one’s nerves. Believe me, when I go to bed I never think that they can fire me tomorrow. But neither will I say that I’m not going to do anything to stay in my post longer.
The Day: Did you find your place in the new reform Cabinet? What chance do you think this team stands of carrying out all those promises?
O.B.: I can see no obstacles in joining this team. I am a convinced exponent of reform and there is no doubt that reform is necessary. I will do my best. As for making predictions, I never do it. I just try to do my job the best I can.
The Day: Were there any previous discussions or did you just find yourself part of the new team, automatically? How is your relationship with the new Premier?
O.B.: There were no discussions, and changes in the Cabinet do not affect me directly. I am at the head of a body with special status and my candidacy must be confirmed by Parliament. I did take part in several Cabinet sessions, and I can tell you that we are on perfectly normal terms. Mr. Yushchenko? Well, what kind of relationship would you expect between two persons championing reform? Normal, of course. Whether or not he succeeds does not depend on me. But I will do my best to help him where and whenever I can. It is true that previously I found my job much harder. There were complex and sometimes contradictory tasks to solve. For example, before the presidential elections the State Property Fund contributed to the budget to pay wage and pension arrears. At the same time, we had to sell public property in such a way as not to provoke social outbursts and strikes at the factories being privatized or anger their managers any further.
ON ACHIEVEMENTS
The Day: Have you sold much? What do you personally think of the fund’s performance last year? Have there been any achievements?
O.B.: I can’t say that we have sold a lot, but what we have we did more or less peacefully. We had two foreseeable indices: UAH 675 million to be added to budget revenues and some UAH 800 million to be contributed to the national debt. Over the year, SPF has remitted some UAH 700 million to the budget. Compared to 370 million in 1998 and 70 million in 1997, the increment is noticeable. And I would describe the fact that we collected this money last year as an achievement. In fact, it was an exploit, considering investors’ preelection uncertainty.
The Day: Really? How would you then describe the results of the latest presidential order to step up privatization, specifically the fund’s obligation to add $500 million to the budget in 2000 and a total of $3 billion in three years?
O.B.: Stepping up privatization is not only the fund’s initiative. The Cabinet, for one, passed a resolution listing the property to be privatized this year. As a result, we have two lists. One with enterprises to be completely privatized and the other with enterprises to be sold on a priority basis. There is now one problem: using the vehicles proposed by international financial institutions, we will get the proceeds only in the last quarter of the year. Also, the procedures of selecting consultants are time-consuming, and I don’t know how we will afford their fees. And we need the money this quarter.
The Day: What blocks of shares are you going to sell?
O.B.: Those we haven’t sold yet. An over 25% interest will be sold by tender and under 25% on the stock exchange.
The Day: Does it mean that Ukrtelekom’s destiny will be finally decided?
O.B. /B>: The Telecommunications Committee has completed its corporatization. A bill on Telekom’s privatization has been submitted to the Cabinet, and it will be forward to Parliament. Once Verkhovna Rada passes [Ukrtelekom is formally still on the list of property not subject to privatization — Ed.], this enterprise will be entirely under SPF control, and we will proceed to put together a share placement plan.
The Day: And the block of shares to be sold in that case?
O.B.: 25% interest, that’s the law.
The Day: Are there any interested buyers?
O.B.: Yes, except that I don’t know how much they are prepared to pay. In other words, we have prospective bidders, but in words only.
The Day: How much will it cost?
O.B.: The cost of a block of shares depends, among other things, on the political situation on the date of sale. However, we should not forget that the interest put up for sale is not large enough to cause any great stir.
The Day: Indeed, it’s not even a blocking interest.
O.B.: It’s just the first step, remember? Setting the right price is important.
The Day: All right, but could you name approximate figures? We remember that a year and a half ago Serhiy Tyhypko, then Deputy Premier, promised it would sell at some three billion.
O.B.: I never specify any prices. It’s a market, isn’t it?
The Day: We’ve noticed.
O.B.: So long as I have my job I remain responsible for every figure I quote. That 2.5 billion hryvnias stated in the 2000 draft budget is a tentative estimate, something we need to form blocks of shares, and there are so many factors influencing these figures no one is likely to come up with the right forecast.
The Day: We are talking Telekom, aren’t we?
O.B.: We are, and in this case quoting any figures would not be serious.
The Day: What about $500 million mentioned in the presidential order? Is it serious?
O.B.: These figures are connected with the budget. They must be implemented and it is for SPF to decide Telekom’s share there — or whether the company will be there at all. Of course, if we could lower the figures — you see, selling public property is not that simple. It only seems that foreign investors can come and write checks. The figures are very impressive. Personally, I think that an edict like this one had to be issued sooner or later and we’ll need further documents to speed up the process.
ABOUT RUSSIA’S INTERESTS
The Day: We know that Russia has a small list of 34 strategic projects whose blocks of shares it would like to receive on account of the arrears on energy supplies. It would be very interesting to hear your comments and predictions.
O.B.: Yes. There is a list. Russia has presented it. By the way, Russia has long offered to let us pay by handing over enter-prises.
The Day: The Russians want a controlling interest, don’t they?
O.B.: The list doesn’t specify. Before discussing the possibility we have to agree in principle on paying our debts in this manner. From what I know, the Ukrainian side has thus far said no. It’s a complicated issue and negotiating it involves the presence of debts and our inability to pay them in any other way. In other words, for want of alternatives Ukraine will have to do just that. If it does, this list will be revised, of course, and thoroughly analyzed here (the list includes such “interesting” enterprises as Pivdenmash, Azovstal, MotorSich, Arsenal, Antonov Aircraft R&D Association, etc. — Author). I have no information that anything is being done in that direction.
The Day: What’s your personal opinion? Should Ukraine do this?
O.B.: I see nothing terrible about it, in terms of approaches to the payment of our foreign debt to all our creditors. One thing is important: we must analyze everything thoroughly: terms, conditions, and prices. In other words, the point in question is the price of such enterprises. Will it be mutually acceptable or not? Personally, I think that this alternative has an advantage in that we can pay our debts without all those complicated procedures of tenders. In a word, I would say yes, because we will have to sell them anyway. So it doesn’t make any difference really whether we sell and use the proceeds to pay our debts or get this money on account of our debts. Of course, this calls for special vehicles to be developed. Yet in principle it is quite realistic.
