Kazakhstan has changed the rules for the privatisation of state property: assets can no longer be sold at repeated auctions at excessively reduced prices, and the mechanism for direct sales to strategic investors has been abolished.
WHAT CHANGES HAVE BEEN MADE
According to the Supreme Audit Chamber (SAC), the changes were adopted following an audit of the effectiveness of state policy in the area of privatisation and an analysis of the implementation of comprehensive privatisation plans for 2016–2020 and 2021–2025.
One of the SAC’s recommendations was the introduction of restrictions at repeated auctions with price reductions. Previously, the legislation did not set a minimum price limit for property at third and subsequent auctions. This created the risk of state assets being sold at a nominal price.
The auditors proposed establishing a rule whereby the price at such auctions cannot be lower than the amount of the guarantee deposit. This provision was included in the Law "On Introducing Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Civil Protection, Electric Power Industry, and State Property Management".
WHY WAS DIRECT SALE TO STRATEGIC INVESTORS ABOLISHED
The second change concerns the mechanism for the direct sale of state property to strategic investors. Previously, this procedure allowed assets to be sold without competitive bidding processes.
The SAC indicated that such a mechanism contradicted the principle of openness. Upon the auditors' recommendation, the provision for direct sale was completely removed from the legislation.
WHAT THIS CHANGES FOR THE PRIVATISATION SYSTEM
Following the introduced changes, privatisation procedures have become more transparent. The restriction on the minimum price at repeated auctions is aimed at protecting state assets from being sold at reduced prices.
The abolition of direct targeted sales, as noted by the SAC, ensures equal access for potential buyers to participate in privatisation.