With the purpose of foremost development of private sector, expansion of its share in country's economy as the most important priority of deepening of economic reforms, fundamental reduction of state ownership in authorised funds of entities, increase of their investment appeal, development of securities market, the Resolution of the President of the Republic of Uzbekistan "On Program of Denationalisation and Privatisation of Enterprises for 2005-2006" was adopted on March 14, 2005.

The Program includes 2246 enterprises and objects divided into three groups depending on the social and strategic importance, degree of liquidity of actives and methods of privatization. The greatest number of the enterprises and the objects, where the state assets are offered for sale, concern to the municipal property (680), "Uzbekneftegaz" NHC (203), Ministry of Public Education (131), Uzbek Agency for Press and Information (119), Ministry of Public Health (102), Ministry of Agriculture and Water Resources (61), "Uzbek ipagi" association (50).

Particularly, appendix 1 to the Resolution includes 1385 enterprises and objects belonging to 72 associations and large economic entities, where unsold state assets, objects of incomplete construction and social infrastructure are to be realized completely in the exchange market which within 2005-2006.

Appendix 2 includes socially significant 115 objects and enterprises of various branches, in which unsold state assets within 2005 will be exposed on the competitive tenders at zero redemption cost with condition of acceptance by investors of investment comitments. Theses objects mainly include printing houses, kindergartens and other objects located in the Republic of Karakalpakstan, Kashkadarya, Khorezm and other regions. Practice of realization of such objects has shown, that objects, which were not sold at the exchange trades before due to their high estimated cost, are in demand at potential investors at those tenders, where the basic criterion is effective business-plan and investment commitments, the volume of which as a rule exceeds the minimal amount, established by the State Tender Commission.

The list of strategically significant 746 enterprises belonging to "O'zpakhtasanoat" association (cotton industry), "Uzbekenergo" SJSC (energy sector), "O'zbekiston temir yo'llari" SJSC (railway sector), "O'zkimyosanoat" SJSC (chemical industry), "O'zmevasabzavotuzumsanoat-holding" HC (food and beverages production), as well as universal and dehkan bazaars (326 units), where the state ownership is decided to retain at a rate of 51 and more per cent of the authorized capital, is approved in appendix 3.

On a background of sharp reduction of a number of joint-stock companies, created due to privatization, there is their enlargement, the most part of the state enterprises will be transformed to other organizational forms of ownership, such as liability limited company and private enterprises. Thus, in 2005, 980 state enterprises have changed their form of ownership to non-state, including 460 – according to the Program of privatization.

Sale of state share holdings, enterprises and objects provided the realization of measures on reduction of a state share. During 2005г state shares in charter fund of 177 joint-stock companies and 282 LLCs sold for 26.7 billion soums and 4.8 billion soums, respectively.

Implementation of the mechanism of step-by-step reduction of the starting price allowed to sell shares of 116 joint-stock companies for a total sum 9.94 bn soums (with total starting price of 5.94 bn soums , as well as 533 state objects at tenders in real-estate exchange for 6.8 bn soums .

Through tenders in real-estate exchange more than 6.8 thousand state objects have been sold for 19.0 billion soums, including realization of 555 objects for 11.3 bn soums in accordance with the Program of privatization.

As a whole in 2005 as a result of work, carried out on privatization, total receipts from all sources constituted 80.5 billion soums (2.7 % above the parameter for 2004). The greatest volume 49.3 billion soums has been provided due to the sale of shares of the privatized enterprises and 29.9 bn soums - objects of the real estate exchange .

Realization of enterprises for ‘zero’ price under investment commitments of investors

Last year once again has confirmed efficiency and correctness of mechanism of selling state shares in unprofitable and economically insolvent enterprises and other state objects for symbolic price (or so-called ‘zero’ price) with taking investment commitments by investors, approved by the resolutions of the government. Such approach has sped up transfer of inattractive state objects to real proprietors, the organization of new manufactures and workplaces to a private sector of economy.

As a whole, in accordance with the governmental decisions 316 objects were sold at zero redemption cost with total assumptions of investment obligations worth 43.1 billion soums (twice as much as the minimal size recommended by the State Tender Commission), out of which 14.3 billion soums has already been implemented (101.2 % from the forecast).

Brought investments have considerably improved an economic situation at the enterprises. For example, production of construction brick in Navoi house-construction enterprise, which were stopped over 10 years ago, has been rehabilitated as a result of using alternative technology and bringing new equipment for 205 million soums. Thus, for 8 months of 2005, new production worth 566 million soums has been produced and sold, over 100 workplaces have been restored.

Not functioning dispensary namely Obi Hayot (Vital Water) in Khorezm region has been capitally repaired by the investor within one year and equipped with the modern medical equipment for some 80 million soums. Since April of 2005 the enterprise has been functioning as sanatorium, and within a summer period children from needy families received treatment for reduced prices, thanks to the initiative of the investor.

As a whole, at those enterprises and objects, where investors have completed fulfillment of their of investment commitments, more than 200 new workplaces have already been created, 7 non-functioning kindergartens have been capitally repaired and accepted new guests.

In general, as a result of fulfillment of investment commitments on the state-owned objects sold for zero price, over two housand new workplaces is envisaged to be created.