President Disputes Legality of Power Companies’ Privatization

Ukrainian President Viktor Yushchenko has filed suit with Constitutional Court, questioning the constitutionality of recent government resolutions pertaining to the privatization of four power companies: Dniproenergo, Donbasenergo, Zakhidenergo and Centrenergo. The Court’s press-service reported the development.

The legislation in question includes resolutions # 196 and # 478-p of March 19, 2008, which included the power companies into a privatization plan for 2008 and transferred their shares from the Energy Company of Ukraine to the State Property Fund of Ukraine. The president also questioned several provisions of resolution # 313 of April 2, 2008, On the Improvement of the State Property Management.

On April 11, UNIAN reported that the president had suspended the government resolution of March 19, as well as the government instructions of February 22 and March 19 regarding the planned privatization of the four regional power companies.

In a decree posted on the presidential web-site, the president claimed that these documents had violated article 17 of the Constitution, which stated that the state had to protect national economic security. The president said that several different laws had defined the four power companies as enterprises of strategic importance for both Ukraine’s economy and its national security.

The president also claimed that if the Energy Company of Ukraine was stripped of these assets, its profits would drop considerably and it would be unable to repay its debts. This will push the ECU to the brink of bankruptcy, dealing a heavy blow to national economic security, the president said.

The resolutions will be suspended until the Constitutional Court issues a ruling.