More than 5,000 items of State property have so far been privatized through both open and closed tenders. Only a few big companies and organizations are left in State hands. Director of State Property Bureau L.Ganbat answers questions on the present situation.

Which companies will be privatized this year?

The list has not yet been approved by the Government. Our proposal includes Baganuur LC, Thermal Station-3 by concession law, Erdenet’s thermal power station, Autoimpex and Erdenezam. We have also suggested handing over the Mongolian Stock Exchange to an experienced professional team who will run it under contract.

What about the Erdenet factory?

It was not included in this year’s list. The shares of such a factory are registered and traded in stock markets.

And Mongolian Telecom?

It is in the list. But Korei Telecom, that owns 40 percent of Mongolian Telecom, has first offer of refusal. Only if it does not wish to buy the 54.76 percent owned by the State, will then be sold by international tender.

What about UB Railway?

That is another issue altogether. The company runs under an agreement made in 1949 and talks have to be held with the Russian side on changing and updating several provisions. The railway is exempted from paying land tax and such, and it is time to change all these special privileges in the present circumstances.

How many state owned companies are there now?

Our office has a list of 76 companies that are partially or fully owned by the State. Most of the fully owned companies are energy companies. There are about 20 road companies as well as Erdenes MGL and MonAtom in the mining sector.

Apart from auctions and tenders, what other methods of privatization can be tried?

I think using the IPO method will be better. There additional capital can be raised by selling new shares. This can then be used on renovation and extension. Privatization yields no benefit if the buyer does not make fresh investments in the company. IPOs would be better that way.