Over $309m of state-run shares divested in H1

October 5, 2019

TEHRAN- Iranian Privatization Organization (IPO) has offered just 13 billion rials (about $309.5 million) of state-run shares to the private sector during the first half of the current Iranian calendar year (March 21-September 22), IRIB reported.

On September 19, Iranian Finance and Economic Affairs Minister Farhad Dejpasand said the government should amend its policies and methods of setting the prices and transferring the shares in the process of privatization.

Making the remarks during a ceremony for introducing the new head of Privatization Organization, Alireza Saleh, the minister said: “We investigated the cases of blame on the privatization processes; all transferring trends have been conducted based on the regulations and were complying the laws.”

In its planned budget for the current Iranian year (ends on March 19, 2020), the Iranian government expects to earn some 106 trillion rials (about $2.5 billion) of income from divesting shares of state-run companies to the private sector.

In Iran, implementation of a privatization plan aimed at more productivity, investment making, job creation, promotion of trade balance, more competition in the domestic economy, and reducing financial and management burden on the government has been under the spotlight over the past decade.

The law on the implementation of the general policies of Article 44 of Iran's Constitution on privatizing state-owned companies was declared in 2006 in a bid to downsize the government and promote the private sector’s role in the national economy.

The government envisioned a large privatization program in the Fifth Five-Year National Development Plan (2010-2015), aiming to privatize about 20 percent of the state-owned firms each year. Under the present interpretation of Article 44, some state-owned companies have been privatized to reduce their financial burden on the country’s budget and also increase their productivity. 

Downsizing the government is on the agenda, but a number of factors have been hindering privatization trend in the country, among them, government’s high interference in the management of the transferred companies is a challenging one.

MA/MA

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