UPDATE: Antitrust supports privatization of 5-10% in Russian Railways

(Rewrites headline, lede, adds details in first three paragraphs)

MOSCOW, Feb 17 (PRIME) -- Privatizing 5-10% of Russian Railways is a good idea, Federal Antimonopoly Service Director Igor Artemyev told reporters on Wednesday.

“I believe that privatization of a controlling stake will not be discussed in the foreseeable future. But selling 5-10% of Russian Railways’ shares in order to attract investment and have independent directors on the board, which will control the situation, I believe that it is good,” he said.

The structural changes to the company are much more important than the volume of investment raised, the official also said.

Deputy Director Anatoly Golomolzin said that the antimonopoly watchdog thinks that some units of state monopoly Russian Railways may be privatized in 2016.

CEO Oleg Belozyorov has said that it would be best to privatize no more than 5% in the company.

“Privatization of separate companies of Russian Railways’ group will most probably be discussed,” Golomolzin said. Only the segments which have private competitors should be privatized, he said.

“But the principal thing is different: privatization should follow restructuring and establishment of competitive relations. Competitive relations are undeveloped so far, and it is important to understand to what degree privatization may hurt approval of structurally important decisions … Anyway, development of competition comes first, and only then privatization,” he said.

Russia’s economic plan for 2016 includes state budget replenishment through privatization although the companies which can be sold have not been named so far. On February 1, President Vladimir Putin ordered the government to finalize the privatization list.

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