Stressing that making accurate estimates of the value of public companies with foreign-made machinery is difficult amid wild fluctuations in the foreign exchange rates, Mir Ali Ashraf Abdollah Pouri-Hosseini added that the organization has to wait till the forex market stabilizes.
He noted that a total of 74 companies have been put up for privatization since the beginning of the current year (March 21), of which 45% have successfully been handed over to private owners, Financial Tribune reported.
The privatization of Moghan Agro-Industrial and Animal Husbandry Company in July at 18,500 billion rials ($157.44 million) was a major success story for IPO in the current year, as the sale value equals that of entire transfers in the last fiscal year (March 2017-18), Mehr News Agency quoted Pouri-Hosseini as saying.
Moghan Agro-Industrial and Animal Husbandry Company is located in Ardabil Province’s Moghan Plain where some of Iran’s biggest food processing, dairy, beet and cotton production units are based. The region is also famous for its mechanized gardening and production of organic fruits.
Earlier, Jafar Sobhani, advisor to the Iranian Privatization Organization, said IPO has introduced a number of incentives to energize and reward the participation of private sector in taking over state-run enterprises and assets.
“For example, the enterprises may be sold in installments. Interest rate charged for installment credit will be 14%, if an enterprise is transferred to companies affiliated to the quasi-state sector while it will be 3% if it is handed over to the ‘real’ private sector. Moreover, the period of time until payments are made in full is extended for the private sector,” he told Securities and Exchange News Agency late August.
On the transition of public companies to private owners in recent years, Sobhani said, “All public entities privatized since last year have been transitioned to the ‘real’ private sector. Not a single rial of the shares of public organizations has been transferred to quasi-state bodies.”
One of the main hurdles in the way of “real” privatization in Iran is the emergence of semi-private companies during the flawed privatization process in the not-too-distant past.
The country’s private sector has always criticized the activities of quasi-state companies and the public sector has failed to clarify ambiguities surrounding their activities despite repeated promises.
The quasi-state sector consists of businesses registered as private entities under Iran’s Commerce Code, but in reality they are either wholly or partially owned by military entities, foundations and pension funds.
Noting that privatization deals concluded since the beginning of the current year (March 21) have been worth more than 22 trillion rials ($159 million), the official said, “The number of public enterprises listed to be transferred to the private sector in the current year (March 2018-19) has doubled compared to the last year. Nearly 630 small- and medium-sized enterprises have been listed, 30 to 40 of which have been sold. The privatization of 20 enterprises, including cold storage facilities, horseback riding clubs, gas stations, sports venues and a few power stations, had been scheduled for September 3.”
Since its inception in March 2001-02, Iran Privatization Organization has carried out the privatization of more than 1,470 trillion rials (more than $10.6 billion) worth of state-owned assets, of which about 800 trillion rials (about $5.8 billion) have been traded through the stock market.
"Public assets worth 470.87 trillion rials ($3.4 billion) have been privatized during the administration of President Hassan Rouhani, accounting for around 32% of total privatization deals,” Sobhani said.
“Up to 54% of all privatization deals were concluded at Tehran Stock Exchange, 12% via Iran Fara Bourse over-the-counter market, and 34% through auctions,” he added.