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Ukraine government presses on with energy sell-off

Ukraine’s government, under Prime Minister Yulia Tymoshenko, said on Friday it was proceeding with the sell-off of controlling shares in six regional energy companies even though the president has objected to the sale.

Oleksander Potimkov, deputy head of the State Property Fund, Ukraine’s privatization authority, said the cabinet had decided to proceed with the sale, but offered no details on the dates or form of the sell-off. The sell-offs would be part of overall 2008 privatization plans aimed at raising revenue of 8.6 billion hryvnias ($1.7 billion), including the sale of fixed-line operator Ukrtelekom and the large Odessa Port chemical plant. The sale appeared to be another point of difference between President Viktor Yushchenko and Tymoshenko, who returned as premier last December more than 2 years after the president dismissed her from the job.

Yushchenko had objected to the sales of shares in energy companies in Lviv, Odessa, Poltava, Transcarpathia, Sumy and Chernihiv on grounds that it could hurt the solvency of the state Energy Company of Ukraine, to which they now belong. Government officials discount such suggestions, saying the companies have long been outside government control. Their sale has been under discussion for several years and last year Yushchenko blocked an attempt at privatization undertaken by the previous premier, Viktor Yanukovich, his arch rival.

Under constitutional reforms approved by parliament to end confrontation during the 2004 “Orange Revolution” that swept Yushchenko to power, the president lost many powers. He can only suspend a government order on privatization if it is deemed to have violated the constitution -- subject to a ruling by Ukraine’s Constitutional Court. Tymoshenko stood alongside Yushchenko during weeks of “orange” protests that led to his victory in the re-run of a rigged election but the two quarreled during her first mandate as prime minister in 2005. They reconciled during an election last year that returned a narrow “orange” majority and she was appointed premier again. But the two have had differences over gas supplies, management of the state-run savings bank and privatization. (Reuters)