EghtesadOnline: Iran Privatization Organization has presented a number of incentives to energize and reward the private sector in taking over state-run enterprises and assets, an advisor to the organization said.
“For example, the enterprises may be sold on installment. Interest rate charged for installment credit will be 14%, if an enterprise is transferred to companies affiliated to the quasi-state sector while it will be 3% if it is handed over to the ‘real’ private sector. Furthermore, the period of time until payments are made in full is extendable for the private sector,” Jafar Sobhani also told SENA.
On the transition of public companies to private owners in recent years, Sobhani noted that all public entities privatized since last year have been ceded to the “real” private sector and not a single rial of the shares of public organizations has been transferred to quasi-state bodies.
One of the main hurdles in the way of “real” privatization in Iran was the emergence of semi-private companies during the flawed privatization process in the not-too-distant past, according to Financial Tribune.
The country’s private sector has always criticized the activities of quasi-state companies and the public sector has failed to clarify the ambiguities associated with their activities, despite repeated promises.
The quasi-state sector consists of businesses registered as private entities under Iran’s Commerce Code, but they are in reality either wholly or partially owned by the military, state foundations and public pension funds.
Sobhani noted that privatization deals concluded since the beginning of the current year (March 21) have been worth more than 22 trillion rials ($220 million).
“The greater part of the current year’s privatization deals are at the pricing and offering stages. The number of public enterprises listed for privatization in the current year (March 2018-19) has doubled compared to the last year,” he said.
“Nearly 630 small- and medium-sized enterprises have been listed, 30 to 40 of which have been sold. The privatization of 20 enterprises, including cold storage facilities, horseback riding venues, gas stations, sports venues and a few power stations, has been scheduled for September 3.”
Since its inception in March 2001-2, Iran Privatization Organization has carried out the privatization of more than 1,470-trillion-rial ($14.7 billion) worth of state-owned assets, of which about 800 trillion rials ($8 billion) have been traded through the stock market.
“Public assets worth 470.87 trillion rials ($4.7 billion) have been privatized during the President Hassan Rouhani’s administration, accounting for around 32% of total privatization deals,” IPO’s advisor added.
Sobhani said up to 54% of all privatization deals were concluded at Tehran Stock Exchange, 12% via Iran Fara Bourse over-the-counter market and 34% through auctions.