Ukraine president suspends electricity sell-offs

18:25, 11 April 2008
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Yushchenko has suspended by decree a government order

President Viktor Yushchenko has suspended by decree a government order to privatise four electricity generation companies, including Ukraine`s largest, Dniproenergo, according to Reuters.

Friday`s decree was the latest shot fired in a series of disputes pitting Yushchenko against his on-off political ally, Prime Minister Yulia Tymoshenko.

"The decisions and orders of the cabinet do not comply with the first part of Article 17 of the Constitution of Ukraine, according to which ensuring economic security is one of the most important functions of the government," the decree said.

Both advocates of the 2005 "Orange" revolution, the two have since had a turbulent relationship -- Tymoshenko was Yushchenko`s first prime minister after he was swept to power by mass protests, but he sacked her seven months later.

Since Tymoshenko came to government again last December, the two have had disagreements over the gas supply system, the head of the privatisation agency, whom Tymoshenko wants replaced, and the budget deficit.

It is not unusual for sell-offs in Ukraine to be contested in court or scrapped. The government last year earned $485 million in privatisation revenues, against a target of $2.1 billion.

Yushchenko then also stepped in and suspended the sale of the Odessa Port chemical plant, citing antitrust reasons. The plant is up for sale again this year. The government hopes to reap $1.7 billion in privatisation revenues this year.

Tymoshenko has clashed over the ownership of Dniproenergo with the country`s richest man, Rinat Akhmetov, since last year, when the company decided to issue new shares that diluted the government`s stake to 50 percent and raised Akhmetov`s share.

The supreme court ruled against Akhmetov this week, saying the shareholders` decision was illegal. That took the state`s stake to 76 percent. It wants to sell a 60 percent state.

The other electricity generators that were slated for sale were Donbasenergo, Zakhidenergo and Tsentrenergo.

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