Almost a half of state-owned enterprises not work

"As of today, 51 out of 106 state-owned enterprises are unprofitable, 22 out of 52 joint-stock companies do not bring profit. This suggests that, in general, almost a half of them do not work," the Prime Minister of Kyrgyzstan Mukhammedkaly Abylgaziev said at a meeting today.
It was stressed during the meeting that the profitability indicators of many state-owned objects remain low, and the amount of net profit decreases. This is about such joint-stock companies as Alfa Telecom, Dastan TNC, Entrepreneurship Development Fund, Naryn HES, Naiman HES and a number of others. The cost plan of such enterprises as the Bishkek Machine-Building Plant OJSC and the Guarantee Fund OJSC increased by 206.08 percent and 162.38 percent respectively.
"We must consider the activities of each facility. All state-owned enterprises that do not benefit the budget and the economy should be developed in the framework of public-private partnership. This is the only way to ensure making of profit by unprofitable companies, creation of new jobs and payment of taxes. Unfortunately, none of the heads of state-owned enterprises undertakes to work out concrete development measures and does not raise initiatives," said Mukhammedkaly Abylgaziev.
He outlined that this is why the Cabinet introduced key performance indicators; exactly because of poor management quality many companies are unprofitable. Performance indicators imply a detailed analysis of the work of each manager, following which appropriate measures will be taken.
As a result, the head of government instructed the Ministry of Economy and the State Property Management Fund to prepare a list of state property objects within a month, which will be transferred to trust management with the development of appropriate mechanisms.
"This mechanism will allow to attract real professionals to the management of state-owned companies. The introduction of the principle of outsourcing will create opportunities for the efficient use of private sector resources in the interests of the economy. I want to stress: this does not mean that these objects will be given into private hands. Problems with the lack of professional staff, lack of funding, low level of corporate governance and the accumulated problems with decision-making in the field of state property management remain unresolved. This indicates the need for fundamental reforms," he added.
Mukhammedkaliy Abylgaziev also stressed that creation of the National Management Company JSC would allow to introduce a centralized management system for state-owned companies based on holding model and involve top managers. This will contribute to more effective decision-making aimed at attracting additional resources and investments in state-owned enterprises in the interests of the republic's economy.