OREANDA-NEWS. Economic and Development Minister German Gref has indicated that the privatisation of national fixed-line holding Svyazinvest is unlikely to take place for at least two years, according to press reports. A cabinet meeting was held this week to discuss the privatisation of a number of federal assets. However, Svyazinvest was absent from the list of assets identified for privatisation in 2008, which are expected to generate around 12 billion roubles (US$466,1 million).Significance: Privatisation of Svyazinvest was not expected to occur before Russia's next presidential election, in 2008. However, Gref stressed that Svyazinvest's privatisation ought to occur within two years. He stated that privatisation would increase the competitiveness of Russian companies and stimulate industry - in the case of Svyazinvest, creating funds for the upgrading of its fixed assets.

The injection of funds and the issue of releasing outdated analogous telecoms equipment are the main challenges now facing Svyazinvest, according to Gref. He indicated that the solution would be either an IPO, a sale of a stake to a private investor, or an investment from budget funds. The operator is currently 75% minus one share owned by the state, with the remaining stake owned by Comstar (see Russia: 12 December 2006).