2005: THE YEAR IN REVIEW

Sale of Kryvorizhstal hailed as huge success

The Financial Times (London) commented in its October 26 editorial on the reprivatization of Kryvorizhstal, calling it "An Exemplary Start." Following are excerpts of that editorial.

"This week's auction of Kryvorizhstal steel mill was a resounding triumph for Ukraine's fledgling market economy and much-needed good news for Viktor Yushchenko's government. The 4.8 billion pounds paid by Mittal Steel exceeded expectations and was achieved through a fair and open process.

"It will reassure investors unsettled this year by divisive government debates; it will also reassure Mr. Yushchenko's restive supporters that he has the will to redress the wrongs of Leonid Kuchma's corrupt government.

"The sale of Kryvorizhstal last year was one of the worst of some questionable post-Soviet privatizations. Foreigners were excluded from the auction, and the mill was sold for only $800 million (U.S.) to a group of local businessmen, among them Mr. Kuchma's own son-in-law.

"It was, therefore, the most obvious candidate for reprivatization. The more challenging question is what should be done next. ...

"Ukraine's review of past privatizations must be limited in scope, governed by transparent rules and completed within a clearly stated, and very brief, time. Otherwise, the process risks being distorted by political vendettas, as with Yukos in Russia."

Copyright © The Ukrainian Weekly, January 15, 2006, No. 3, Vol. LXXIV

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