Spotlight on the Biggest Privatization in Ukraine 

Since privatization is a big topic again with the fight between Yushchenko and Tymoshenko, I thought it would be worth looking back to see what's going on with Kryvoryzhstal, now Mittal Steel Kryvy Rih.

For background, this state asset was first privatized in an untransparent bid by Akhmetov and Pinchuk in Fall 2004 for $800mn, then reprivatized in November of 2005 in a fair and open bid that provided a massive amount more money for government coffers ($4.8bn: more than the previous 10 years of investment). It's been quite a while since I've seen big news about the plant, but if we're to decide what we think of Tymoshenko's new privatization proposals, knowing the current status of this key privatization will be important.

2006-2007 

In the spring of 2006 ran into troubles (some big troubles) with State Property Fund Chairwoman Valentyna Semenyuk. Taking into account that she fought against the privatization to Mittal Steel from the beginning (preferring, implicitly, the much less economically beneficial, nontransparent, and suspicious privatization to Akhmetov and Pinchuk), this was not an unexpected attack. However, her accusation that Mittal wasn't keeping the promises regarding wages that were part of the privatization deal did not seem to have been refuted by the company in the Ukrainiska Pravda article above, thought the company resolved to do better. Two days later, according to this article, the company raised the wages it pays its employees to the highest in the entire metallurgic sector.

Things also seem to have improved in fall of 2006, when Mittal Steel got a loan from the European Bank for Reconstruction and Development for $500mn to modernize the facilities. The company claimed to have already invested a further $85mn of its own money in the same effort. This article in New Europe states that the company managed to increase sales by 16% as the result of its efforst in 2006.

In 2007, the company bought a new coke battery, increased production in the first quarter, and submitted plans for further investment and growth, especially growth in sales in the Ukrainian market. A January 2008 report states that the company lifted output for 2007 year by 7%. 

Finally, the company is cited in this report on the Ukrainian steel market as the major factor in increasing competition in the Ukrainian steel production, and thus improving the market overall.

2008 

For it in 2008 is this conflict, in which it seems the company has defaulted on one promise to improve the situation for workers, as well as a number of lesser articles in the privatization agreement of 2005 (again coming into conflict with Semenyuk).

I originally looked back into this issue, because a friend of mine who knows people working in or around Mittal Steel Kryvy Rih told me that his acquantences were complaining that the new company was worse than the old one.

Does anyone else have more information on this? The track record in the articles of continued investment and growth looks good from a business standpoint. However, is this be happening without greatly improving the situation for workers? What's happened to the high wages they were reported to have been earning in 2006?

Thanks in advance for any article links you might have!