At a press conference on February 26, President of Azerbaijan Ilham Aliyev touched upon the future of state-owned companies, which were transferred under the management of the Azerbaijan Investment Holding (AIH) for the purpose of recovery.
“Time has shown that the management system of state-owned companies is lame and has actually become a system of sucking money and subsidies from the state budget. In many ways, state-owned companies have become a burden … We intend to bring the process of their corporate governance in line with international standards, by analogy in Western companies, to make it transparent and ensure that they are not unprofitable, ”President Aliyev said, answering the question Reuters on the possibility of privatizing SOCAR and other large state-owned companies.
“The State Oil Company of Azerbaijan (SOCAR) is subsidized by a number of projects. Despite the fact that SOCAR is a large taxpayer, it also receives subsidies from the state budget, in particular, for the country’s gasification project. This is not permissible,” the head of state said.
According to him, such a situation is all the more unacceptable in a period when Azerbaijan has to restore the liberated territories and finance these works. At the same time, Aliyev noted that in 2021 there would be no privatization of SOCAR and other state-owned enterprises, since they need to be improved.
“If one of the state-owned companies represented in the management cannot work honestly and transparently, bring their activities to the required level, they will be held accountable, perhaps not only administratively,” the head of state emphasized.
SOCAR’s net profit in 2019 decreased by 46% to 651 million manat ($ 383 million) from 1.2 billion manat ($ 706 million) a year earlier. Due to the coronavirus pandemic and low world prices for hydrocarbons in 2020, its net profit will be even lower, however, according to financial statements, SOCAR will publish this figure only at the end of summer 2021.
SOCAR’s debts on long-term loans exceed 11.4 billion manats, while the total external debt of Azerbaijan is about 15 billion manats.
As for gasification, about 130 million manats were spent on gasification from the state budget in 2020 alone. In 2019 – 53.5 million manats. But the level of gasification has not yet reached 100%.
In 2009-2019, SOCAR’s Azerigaz Production Association provided gas to 2349 settlements, laying new gas pipelines with a total length of 51.915 thousand kilometers, and repairing gas pipelines with a length of 9.742 thousand kilometers. The total number of gas subscribers among the population is currently about 2.2 million people.
The leadership of SOCAR will actually have to pass a professional aptitude test in 2021 (according to the decision of the head of state, reflected in the documents on the creation of the AIH and the Supervisory Board of SOCAR. So personnel reshuffles are not far off.
Source: Turan News Agency