The Presidential Academy studied innovations and made recommendations for improving the document
Russian privatization legislation has changed noticeably recently. According to experts from the Laboratory for Analysis of Institutions and Financial Markets of the IPEI Presidential Academy, Alexander Abramov and Georgy Malginov, there is still room for improvement.
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The main changes in No. 178-FZ «On the Privatization of State and Municipal Property» affected the privatization of cultural heritage sites (CHS), gas supply, ports and property confiscated in corruption criminal cases. Additional conditions were created for obtaining such objects.
Thus, a rule has been developed for the cultural heritage site concerning the land that belongs to the facility. Now it is impossible to lease the plot, as well as sell it. In addition, there are requirements for placing advertisements on such buildings and their territories. Also, when privatizing a cultural heritage site, the new owner is obliged to preserve and restore the building. In addition, investors now have the opportunity to obtain ownership of the facility through an auction, and the competition is only available for facilities that are in an unsatisfactory condition, but still with the condition of carrying out work to preserve the cultural heritage site.
As for gas supply facilities, according to the new standards, owners will have to carry out repairs and maintenance, as well as use them for their intended purpose, that is, provide services for transporting and supplying gas to consumers, technological connection of gas-using equipment and capital construction projects to gas distribution networks. In the absence of such an encumbrance in the purchase and sale agreement, the privatization transaction is considered legally void.
“The new standards also apply to river port facilities that are in unsatisfactory condition. Regardless of their technical condition, river port facilities that are not in demand as inland water transport infrastructure facilities can, in accordance with the latest legal innovations, be privatized in the manner and methods established by the privatization law, without taking into account existing encumbrances,” said Abramov.
In addition, a separate article has appeared to regulate the privatization of housing classified as corrupt property, which depends on the market value of residential premises on the secondary market.
According to the authors of the analytical report, In general, the legal innovations of the past year are aimed at eliminating existing restrictions on privatization, accelerating its pace and increasing the budgetary effectiveness of privatization transactions.
“It is very typical in this regard to allow the privatization of OKN at auction, but to an even greater extent — the sale of residential premises from the corruption property. Both innovations are clearly aimed at maximizing budget revenues through the use of an exclusively auction mechanism. This makes it obviously impossible to noticeably reduce the price of the property being sold, as happens with the usual sequence of privatization procedures. At the same time, there is no regulation of the situation when the price of housing is below the standard price threshold established for sale at auction. And the possibility of privatization of gas supply facilities also raises questions in the context of the ongoing program of social gasification and increased attention to ensuring the safety of infrastructure,” says Malginov.
As a result, it turns out that the attractiveness of such specific property as OKN, river ports, gas supply facilities may not look obvious to potential investors. Therefore, according to the authors, the law still requires improvement.