Privatization Update: “MIAT” will not be privatized, it is “dangerous”

Dec 21 • Government, News • 1402 Views • No Comments on Privatization Update: “MIAT” will not be privatized, it is “dangerous”

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The State Property Agency issued list of entities to be privatized next year and it will be proposed to the State Great Khural. According to the renewed list, major entities are removed from the list.

In the list of 2004-2008, MIAT, Mongolia Telecom, Khutul Concrete and Lime Factory and Mongol Post Companies were the top priority. But, the State Property Committee considers privatizing these state owned companies will bring negative impact to the society, economy and the national security.

The Government pursued policy to stabilize positive financial and corporate governance of MIAT in order to improve its performance and privatizing domestic transportation through separating its business and social services. But now the Mongolian Government retreats from its intention of privatization. The State Property Committee sends its grounding to the Government. The Committee considers that for a land-locked country national flag carrier must be national and state involved one. South Korea, Japan, Chinese investors were interested in its privatization. MIAT is the key player in the air transportation business.

Sources close the matter says that “Khutul Cement and Lime Factory” is also not to be privatized. The factory’s bid was as ₮12,5 billion, but it was removed from the list, because it is responsible for heating and electricity of Khutul town. Therefore, the Committee decides that if it is privatized, Khutul town’s faith will be miserable. Previously, when Sharyn Gol Coal mine was privatized, Sharyn Gol town was in difficulty.

Mongolia Telecom is also included in the privatization list. But the Committee almost admits that it will not go to private. The privatization will stop exclusive renting of the main communication network for Mongolia Telecom. Also re-evaluation will be made by the Committee in order to increase state ownership. Additional share will be proposed to Korea Telecom according to the agreement, if it rejects the offer, it will be open for international tender.

Committee also worries about other smaller entities, because of the major companies, their tender disclosure might become unattractive.

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