“For competition: why do the State Unitary Enterprise TEK SPB want to privatize” — Tatyana Tereshchenko for Vecherny St. Petersburg
The need arose after the entry into force of amendments to the federal law "On Protection of Competition", adopted in 2019
Governor Alexander Beglov submitted to the St. Petersburg Legislative Assembly a bill on the privatization of the State Unitary Enterprise "TEK SPb". It was planned to turn the company into a joint-stock company back in 2022, but decided to postpone the changes for two years.
Don't say "GOOP"
The need for privatization arose after the entry into force of amendments to the federal law "On Protection of Competition", adopted in 2019. It follows from them that the revenue of state unitary enterprises (GUPS) from activities in a competitive market should not exceed 10% of the gross revenue of the enterprise for all types of activities. If this condition is not met, then by 2025, state unitary enterprises must either be liquidated, or transformed (for example, into joint-stock companies), or their activities must be changed.
As indicated in the explanatory note to the draft law, SUE Fuel and Energy Complex of St. Petersburg (SUE TEK SPb) carries out two main types of activities. One of them is the transfer of thermal energy — this is the sphere of natural monopoly. But the second one, thermal energy generation, is working in a competitive market. The document says that generation gives GUP TEK about 70% of gross revenue, while transmission — about 30%.
The city Parliament has already decided on the privatization of the enterprise at the end of 2021. However, then the authorities postponed the process for two years. The reason for this decision was the need to clarify the composition and value of the property complex, accounting for budget investments in capital construction facilities, completion of budget-funded investments and existing government contracts. However, the head of the analytical department of Prime Advice Tatyana Tereshchenko notes that procedural difficulties may arise:
While there is no widespread experience of privatization of state unitary enterprises, a lot of approvals are required regarding the details of the process, including with the same UFAS. Additionally, time is needed to decide for a specific state unitary enterprise whether shares of a reorganized state unitary enterprise should remain with a public entity or be offered to private investors, as well as to assess whether such investors exist at all, especially if we take into account the specifics of tariff regulation and restrictions in the field of thermal energy.