DEPUTY ECONOMIC DEVELOPMENT AND TRADE MINISTER ON STATE ENTERPRISES AND PRIVATIZATION

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MOSCOW, September 29 (RIA Novosti) - The government is going to rigidly regulate the creation of federal state unitary enterprises, deputy economic development and trade minister Andrei Sharonov told journalists.

"We propose that the procedure of creating federal state unitary enterprises be revised. They should be formed only according to the government's decision," the deputy minister said.

According to him, this is explained by the fact that such enterprises are annually created in the country. As a result, despite all the measures the government takes to reduce their number and to privatize them, it grows with every passing year.

Sharonov reported that Aeroflot would not be sold in 2005. The government made this decision on September 28. He also confirmed that the Magnitogorsk metallurgical plant was included in the privatization plan for 2004 and the organization of the auction on the plant's sale would begin this year.

"The sale will, most likely take place next year or, at least money will be assigned for the next year's budget, the deputy minister reported.

According to him, the economic development and trade ministry proposes to sell the remaining state stock in Svyazinvest, the world's major telecommunication holding. The Svyzinvest group structure incorporates seven large inter-regional companies, six public electric communication companies, OAO Giprosvyaz and OAO Rostelekom, a major operator of long-distance and international communications.

"It is proposed to sell the entire remaining stock in Svyazinvest - 75% minus one share," Sharonov said and added that in this way the state would fully withdraw from the company's capital.

He also pointed out that issues related to ensuring the country's defense and security should be solved when Svyazinvest would be privatized.

As a monopolist in the communication market the company traditionally fulfilled state orders connected with defense and security.

Earlier,Sharonov declared that by the presidential decree Svyazinvest was included in the list of strategically important enterprises. "To privatize the company it should first be withdrawn from this list also by the presidential decree," the deputy minister said.

"The draft of such a decree has been prepared and is now being coordinated with the departments. I don't think this process will be long," he added.

Sharonov also pointed out that Gazprom would attract independent valuers, who will be selected on a competitive basis, to estimate the assets for a deal for Gazprom and Rosneft merger.

Only when the estimate is made the federal departments will take part in the procedure of merging. The directive to be prepared will be coordinated by the economic development and trade ministry, the ministry of industry and energy, the finance ministry and the property ministry.

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