Viktor Tolokonsky sells out Krasnoyarsk region assets
Viktor Tolokonsky, the Governor of the Krasnoyarsk region, has started a clearance sale. Companies belonging to the regional authorities are being sold by auction. Many of these companies had been considered socially significant enterprises just recently. Deputies of the Regional Legislative Assembly do their best to hinder the efforts of the Governor.
Viktor Tolokonsky has become the Governor of the Krasnoyarsk region in September 2014. His entire past career was linked with Novosibirsk; therefore, it took the new head of the region almost a year to settle into the new job. Then he started steadily selling assets of the Krasnoyarsk region.
In June 2015, the controlling block of shares in Emelianovo Krasnoyarsk Airport has been sold. The property complex of the airport had earlier belonged to the Regional Government; its annual profit was 120 million rubles. The new owner of 51% of its shares is Krasnoyarskaya GES (Krasnoyarsk Hydroelectric Power Plant) Public Joint Stock Company belonging to Basel Aero, which is a part of Basic Element Holding Company owned by Oleg Deripaska. Two months later, Krasnoyarskaya GES has received a permission from the Federal Antimonopoly Service to acquire 100% of Emelianovo shares. However, the Regional Ministry of Transport has stated: this does not mean that the remaining 49% of shares are to be sold; the Krasnoyarsk region intends to retain the ownership of those. In December 2015, Krasnoyarskaya GES has transferred the rights on the controlling block of shares in Emelianovo Krasnoyarsk Airport to KrasInvest Limited Liability Company, which is a part of RUSAL company also belonging to Deripaska. The Deputies of the Legislative Assembly of the Krasnoyarsk region have gladly approved both deals. Only the Regional Administration of the Federal Antimonopoly Service had questioned the legitimacy of the sales and opposed those. Oleg Kharchenko, the Head of the Regional Administration of the Federal Antimonopoly Service, said: “Owners are changing, but no one can understand where are the shares”. But the Moscow colleagues have quickly silenced the local antimonopoly authority.
Emelianovo Krasnoyarsk Airport
In January 2016, Tolokonsky said that the Government of the Krasnoyarsk region would examine the proposal to sell the remaining portfolio of shares. According to a CrimeRussia source in the Regional Government, this proposal has been submitted by a company belonging to Oleg Deripaska.
The Governor has stated that in 2016, the revenues generated by Emelianovo can reach 500 million rubles – even though the passenger traffic flow has reduced by 25%. In that context, it is totally unclear why the local authorities are going to sell a profitable asset? It is also unclear why the only airport in the regional capital should drift out of the governmental control? No one can guarantee that the new owner would invest funds into the airport development and passenger security. But what is known for sure is that the new owner would be able to set prices for airport services – which inevitably affects the cost of tickets.
On January 17, 2016, the regional parliamentarians have stated that they won’t allow to sell the remaining shares and would continue their efforts to retain control over the operations of Emelianovo. But would they really be able to oppose Tolokonsky?
In October 2016, the controlling block of shares in the Krasnoyarsk Housing and Utility Complex (KrasKom) has been sold to the Siberian Generating Company belonging to oligarch Andrei Melnichenko. KrasKom is a major utility provider in Krasnoyarsk; it owns most municipal cold and hot water supply networks. Interestingly, the Deputies of the Regional Legislative Assembly had stated that they will not allow this deal to close because it would create a monopoly in the public utility sector, including inevitable hikes of utility fees. Deputy Anatoly Matyushenko had stated in public that the complete transfer of KrasKom assets to the Siberian Generating Company is “impossible”. Edham Akbulatov, the Krasnoyarsk Mayor, had also assured that there was nothing to worry about: neither the region, nor the city would sell their portfolios of KrasKom shares. However, neither the Deputies, nor the Mayor were able to oppose the Governor. And although the region and city still own 26% of KrasKom shares, the loss of control over the company has already resulted in announcements of utility rate increases: since July 1, 2017, cold water fees for the population would raise by 12% – to 20.34 rubles.
Krasnoyarsk Housing and Utility Complex (KrasKom)
In December 2016, Tolokonsky tried to sell Shushenskaya Marka – a distillery belonging to the Krasnoyarsk region. Since 2004, this enterprise had been the largest producer of alcohol in the region and ranked among the top 40 players on the Russian alcohol market. However, in 2012, troubles arose at the enterprise, and the production was suspended. At that time, Lev Kuznetsov, then-Governor of the Krasnoyarsk region, has decided to buy out the property complex of the distillery to resume the profitable production and guarantee its quality. However, new Governor Viktor Tolokonsky has decided that it would be better to get one-time profit rather than permanent income and ordered to sell the enterprise. The Deputies of the Legislative Assembly of the Krasnoyarsk region have disrupted the plans of the Governor by vetoing the deal. Tolokonsky was so outraged by the unexpected resistance from the normally obedient parliamentarians, that he has even given a reprimand to Anatoly Tsykalov, the Minister of Industry, Energy, and Trade of the Krasnoyarsk region, “for improper fulfillment of service duties”. The Minister failed to convince the Deputies of the sale feasibility and disclosed to them that there is a potential buyer already. Therefore, Tolokonsky – who normally prefers to commend, not reprimand – had to make this extraordinary step. Tsykalov has received an instruction to persuade the parliamentarians by all means. The Minister is so confident in himself, that he has recently said in public: the distillery will be sold.
Also in December 2016, Tolokonsky decided to sell Gubernskie Apteki (Gubernial Pharmacies) State Unitary Enterprise – the largest pharmacy chain owned by the region. Its share on the regional pharmaceutical market is estimated at 23%, while its sales volume is 12 billion rubles. To make this deal possible, it was proposed to exclude this company from the list of socially significant enterprises. But the Deputies have taken a break and suggested to provide a full justification for this step as well as expert conclusions from the Department of Legal Expertise and Audit Chamber.
On January 10, 2017, Tolokonsky has ordered to prepare for sale the governmental portfolio of shares in Krasnoyarsky Nefteprodukt (Krasnoyarsk Oil Product) chain of petroleum storage depots and gas-filling stations. The Agency for State Property Management of the Krasnoyarsk region owns 77% of shares in this company. The Governor said: “This asset does not bring us any real good, but creates an array of problems of all levels; therefore this asset is to be sold”. It is not totally clear, however, what issues does Krasnoyarsky Nefteprodukt cause? The company is profitable – in 2015 it has generated 101.1 million rubles of net profit with the total revenue of 13.4 billion rubles. This is not too much, but not negligible – especially taking that in the previous years, the profit was several times higher. It is not only about the money – the point is that Krasnoyarsky Nefteprodukt delivers oil products to northern Russia, which is risky and expensive. The company owns 14 petroleum storage depots and 138 gas-filling stations in 41 districts of the Krasnoyarsk region. Should it become privately-owned, the new owner might not be willing to supply goods to northern parts of Russia. If other companies take this niche, they would drastically raise the prices due to the lack of competition. In other words, the sale of Krasnoyarsky Nefteprodukt would make people living in polar regions hostages of fuel suppliers.
Krasnoyarsky Nefteprodukt (Krasnoyarsk Oil Product)
The ownership of Krasnoyarsky Nefteprodukt had allowed the Government of the Krasnoyarsk region to control retail gas prices in the region – which are among the lowest in Siberia. In addition, should Krasnoyarsky Nefteprodukt be purchased by a major company (small companies simply do not have enough money for this), the market would be monopolized, and the new owner could dictate the pricing policy.
Krasnoyarsky Nefteprodukt is also critically important for agricultural enterprises; it allows them to purchase fuel at reasonable prices during the sowing season. Many gas-filling stations belonging to Krasnoyarsky Nefteprodukt are located in distant villages in rural and sparsely populated parts of the Krasnoyarsk region. These are not too profitable but have great social significance. Some municipal enterprises, for example, boiler stations, purchase fuel from Krasnoyarsky Nefteprodukt on a deferred-payment basis – not a single private company would allow this. Therefore, none of the previous Governors had ever raised the question of selling Krasnoyarsky Nefteprodukt. But apparently, the Novosibirsk native does not care much about the situation in the Krasnoyarsk region after the end of his governorship. Commenting the controversial decision to sell Krasnoyarsky Nefteprodukt, Tolokonsky said: “Only assets having social or infrastructural significance must be kept governmentally-owned. What we have here is not the case; I believe that this is an ordinary sphere of the market”. Apparently, a potential buyer has already been found. Rosneft had earlier expressed interest to Krasnoyarsky Nefteprodukt – but it needed only high-profitable gas-filling stations in Krasnoyarsk and intended to get rid of other company assets.
In January 2017, Tolokonsky suggested to reincorporate KrasAvia state enterprise as a joint-stock company. KrasAvia provides transportation in distant parts of the Krasnoyarsk region where neither motorways nor railroads do exist. These plans have sparkled mass public protests. Egov Vasiliev, Head of the Regional Workgroup “Fair and Effective Economy” of the All-Russia People’s Front, has flatly stated: “Transportation within the region must be owned and controlled by the Government”. Therefore, Tolokonsky decided to take a break for a while. “The attraction of private investors could be discussed only in the long-term perspective,” – he assured. In fact, he has plenty of time – the next gubernatorial elections will be held in the Krasnoyarsk region only in the two years. And the region still has plenty of assets – for instance, Krastsvetmet jewelry factory. According to the CrimeRussia source in the Regional Administration, Tolokonsky has been recently showing much interest to this enterprise generating some 2.5 billion rubles in profits.
Saburova believes that the Russian authorities violated articles 2 and 5 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, guaranteeing the right to life, as well as the right to freedom and personal inviolability.