on the work performed by the State Property Committee

of the Republic of Uzbekistan and the Market Infrastructure  Organizations

during the first half-year of 2008

The work performed by the State Property Committee of the Republic of Uzbekistan and the Market Infrastructure  Organizations during the first half of 2008 was aimed at implementation of the most important priorities highlighted by decisions adopted at the Meetings of the Cabinet of Ministers held on February 8 and April 18, 2008, contents of the Resolution by President of the Republic of Uzbekistan dated July 20,2007 NoPP-672 "On Measures aimed at Further Deepening of Privatization Process and Active Attraction of Foreign Investments during the years of 2007-2010" as well as other governmental  resolutions.

For the purpose of further perfection of the Legislative Basis, the State Property Committee had prepared and presented to the Cabinet of Ministers drafts of the Resolution by President of the Republic of Uzbekistan "On Measures aimed at enhancement of Private Owners' Responsibility for Stable and Effective Functioning of Privatized Enterprises" and Resolution by the Cabinet of Ministers "On Measures aimed at perfection of Mechanisms for arrangement of Sales of  the State-owned  Assets at Stock Exchange and Over-the-Counter Securities Market and performance of control over fulfillment of Investment Obligations".

Work is being done on revision and presentation to the Cabinet of Ministers of drafts of the following Laws of the Republic of Uzbekistan "On Privatization of  the State-owned Property", "Оn the Realtor Activity", "On the Mortgage Securities", "On State Registration of the Real Property Rights and  Deals concerning It".

The State Property Committee continued its work on implementation of the Resolution by President of the Republic of Uzbekistan dated July 20,2007 NoPP-672 "On Measures aimed at Further Deepening of Privatization Process and Active Attraction of Foreign Investments during the years of 2007-2010", which determines cardinal reduction of the State-owned share sizes at Charter Funds of the Enterprises belonging to Strategic Sectors of Economy, attraction of Foreign Investments for modernization, technical and technological re-equipment of production processes.

35 meetings and talks with representatives of more than 70 foreign companies, those including potential investors from UAE, Russia, Japan, Switzerland, Korea, Kazakhstan, Italy, Belgium, Great Britain, Finland, Turkey and other states, 30 seminars and "round tables" on Privatization Issues were held with participation of international institutions and foreign countries' organizations.

At the State Property Committee's official www.gki.uz web-site,  works on updating the Brief Company Profiles of Enterprises included into the Privatization Program for the years of 2007-2010 are being done. Lists and contents of Legislative and Normative-legal documents regulating Processes of: Privatization, De-monopolization of Economic Branches, State-owned Property Management and further perfection of Corporate Governance have been placed at that web-site as well. During the recent 6 months over 127 visits to the State Property Committee's web-site by almost 19 users were registered.

During the first half-year of 2008 with sale-forecast for 156 State-owned Assets, in fact 174 (111,5%) were sold, the total  deals' sum amounted 48,69 mln. US Dollars and  61,5 billion Uzbek Soums, at which the Investment Obligations undertaken by investors according to the signed Sale-Purchase Agreements, constitute 36,35 mln. US Dollars and 44,96 billion Uzbek Soums (74 percent of the total deals' sum). Within that volume 38 (21,8 percent) pieces of the State-owned Assets were sold through the Stock Exchange and  136 (78,2 percent) - at the Over-the-Counter Securities Market.

The State Tender Commission adopted decisions on sale of 6  pieces of the State-owned Assets with the total Investments' volume of 40,17 mln. US Dollars and 0,23 billion Uzbek Soums,  within that amount the Investment Obligations on modernization of the enterprises subject to privatization constitute 32,34 mln. US Dollars and 0,12 billion Uzbek Soums.

67 objects were sold through Auction and Competition Sales, including those with the Investment Obligations undertaken for the total sum of 2,0 mln. US Dollars and 10,08 billion Uzbek Soums (as compared with the similar period of 2007 - 2,3 folds increase in national currency has been achieved).  

43 objects were sold at "Zero" Purchase Price with the Investment Obligations totaling over 34,45 billion Uzbek Soums (increase by 32,8 folds) and 1,01 mln. US Dollars (during the first half-year of 2007 the State-owned Assets were sold at "Zero" Purchase Price with the Investment Obligations offered only in national currency).

Within the 6 months the State-owned Property status of 237 State-owned Enterprises and Objects has been transformed into the Non-State one. On their basis 5 Limited Liability Societies (2,1 percent) were created and 232 were purchased by Private Owners (97,9 percent). The main part (103) of those objects belonged to Hokimiyats (local State Governance bodies), Ministries of: Health (42), Popular Schooling (15), Agriculture and Irrigation (10) and other economic branches. The biggest portion of privatized enterprises  is represented by the City of Tashkent (59), Tashkent (43), Qashqadarya (20), Namangan (18) Regions.

By July 1, 2008 based on results of General Stockholders' Meetings, out of total 1259 Economic Enterprises with presence of State-owned Shares at their Charter Funds (including those previously transferred into Charter Funds of Economic Associations), such meetings were actually held at 1227 (97 percent) enterprises.

Together with the State De-monopolization Committee, Hokimiyats of Regions and the City of Tashkent, Regional Programs for Financial Rehabilitation of Previously Privatized Enterprises covering 882 economically inconsistent, low-profit and inactive enterprises were approved. Upon the results of analysis made over those enterprises' financial and production activity, Business Plans on their further development were elaborated.

As a result of implementation of measures determined by those Business Plans,  investments in total volume of 43,2 billion Uzbek Soums and 78,7 mln. US Dollars were brought in on the owners account, 3346 new job-places were created, total production volume constituted 234,2 billion Uzbek Soums. At 102 enterprises works on their reconstruction and renovation are being performed. At 373 enterprises improvement of production and financial activity data has taken place, based on property of the previously sold enterprises, 17 new enterprises were created. Owners of 92 enterprises took a decision on sale of their enterprises to other potential investors.

General turnover of the Securities Market during the first half-year of 2008   constituted 315,76 billion Uzbek Soums. As compared with the similar period of 2007, volume of deals related to corporate securities has increased by more than 2,5 folds. At the formal Securities Market, stocks for the total amount of 71,02 billion Uzbek Soums and corporate bonds for the amount of 1,01 billion Uzbek Soums were sold. At the informal  Securities Market, stocks for the total amount of 242,30 billion Uzbek Soums and corporate bonds for the amount of 1,43 billion Uzbek Soums were sold.