In the fight between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko for control of the State Property Fund, Ukraine’s prosecutor general filed criminal charges on May 19 against acting chair Andriy Portnov for illegally attempting to privatize state property and exceeding his authority.

Portnov is Tymoshenko’s candidate to lead the Fund, while Yushchenko supports Valentyna Semeniuk-Samsonenko. Experts are divided on who legitimately chairs the State Property Fund.

“These criminal charges weren’t filed against [Portnov], but against me personally, against the government, and against honest privatization and establishing order in the country,” said Tymoshenko, comparing Yushchenko to his authoritarian predecessor, Leonid Kuchma.

Who will lead the Fund also determines the fate of the Odesa Portside Plant, the nation’s largest producer of ammonia and nitrogen fertilizer which Tymoshenko wants to auction off to raise revenue to pay for social programs and payments. 

Tymoshenko planned to auction the estimated $1 billion Odesa Portside Plant on May 20, but the charges filed against Portnov forced the government to postpone its sale by at least a month, Tymoshenko officials said.

“The decision to postpone the privatization is related to, unfortunately, pressure from the Presidential Secretariat, after which we were unable to get first-class investors which the government was counting on,” said Yevhen Korniychuk, the first deputy justice minister.

Meanwhile, Portnov’s candidacy to become Fund chair appears unlikely.

Parliament planned to consider dismissing Semeniuk-Samsonenko and replacing her with Portnov at its May 22 session.

But the prior day, Presidential Secretariat Chair Viktor Baloha said the pro-presidential Our Ukraine-People’s Self-Defense faction won’t support Portnov’s candidacy, which would have been critical for its approval.

As a result, Tymoshenko will have to nominate another candidate that suits Yushchenko if she wants to have his permission for future auctions.

“If Tymoshenko wants to continue privatization, she will continue it without Portnov,” said Vadym Karasiov, a political advisor to Baloha. “The Tymoshenko Bloc quota for this position remains, but she will propose some other candidate more loyal not only to her, but also to the president.”

Meanwhile, opposition lawmaker Yuriy Miroshnychenko indicated no opposition factions, particularly the Party of the Regions of Ukraine, would support Tymoshenko’s nominee.

Even if Portnov did become the Fund’s next chair, the president took measures to prevent any privatizations, implementing an order from the National Security and Defense Council to prohibit privatizing the Odesa Portside Plant, the Turboatom turbine manufacturer, and four energy distributing companies. 

Despite the political turbulence, a handful of companies are still bidding for the Odesa Portside Plant, including Russia’s Yevrokhim, Estonian­based Nitrofert controlled by Ukrainian billionaire Dmytro Firtash, and Nortima controlled by Ukrainian billionaire Igor Kolomoisky, all of which placed a security deposit.

Norway’s Yara International, also interested in the privatization, hadn’t placed the deposit needed to participate in the auction.

Political observers weren’t convinced Tymoshenko’s decision to postpone the auction was related to the criminal charges filed against Portnov.

Tymoshenko didn’t have any rational explanation for how the privatization would influence Ukraine’s economic development, said Sergiy Taran, the director of Kyiv­based Sotsiovymir Center for Sociology and Political Research, financed by its clients.

Moreover if the auction was held, its legitimacy would be in question since there are currently two Fund chairs, he said.

If Tymoshenko wants to hold privatizations, she should first resolve the diarchy at the Fund, experts said.

The plant still has yet to attract strategic investors, and any company winning an auction at the moment would have difficulty defending the sale in court, said Viktor Chumak, director for policy analysis and security programs of Western­financed International Center for Policy Studies.

Pressure from the National Security and Defense Council, as well as criminal charges against Portnov, also played their role, said Taras Beresovets, director of Polittech political consulting company, whose clients have included the Our Ukraine and Tymoshenko blocs.

At the same time, the president is trying to stop Tymoshenko’s ratings from rising further before the next presidential election, he said.

“Postponing of privatization is bad news for government as its social obligations depend on the privatization program,” Berezovets said.

Source: http://kyivpost.com