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Мoscow Subway Turned into Mom-and-Pop Store

Мoscow Subway Turned into Mom-and-Pop Store
05.10.2009

Deputy head of the Department of Property of Moscow Igor Ignatov confirmed plans of the capital government to privatize state unitary enterprises "Moscow Metro", "Mosgortrans", "Mosvodokanal" and "Moscow Gas", however he informed that authorities do not plan to lose controlling interest in them.

"There are plans to privatize (these enterprises - editor-in-chief of new agency RIA Novosti) to involve investments but so that not to lose control", - he said making public speech at a forum "Russia Calls".

Ignatov did not specify what the terms of partial sale of these SUE would be.

In the beginning of this year representatives of the government of Moscow declared that they intend to begin preparation to corporalisation of these major for municipal economy enterprises.

This year authorities of the capital plan to corporalise 170 of 422 SUE.


From editorial board: Many years ago, when the word "privatisation" was not yet popular and everybody talked about "market" and it "invisible hand" which in an easy state of mind of the prime minister of that time with revolutionary surname Gaydar should make everything that we lived well.

 

Now all are clever, then it was not so. Trusted in market and Gaydar's mind. Then, in those remote ages I wtoe a small essay about how it's possible to improve Moscow subway by means of the market. Whether something close to perfection could be improved by the market?

 

It turned out that it's impossible in any way. Because Moscow subway was constructed for postindustrial epoch and it's impossible to make it better using methods of more primitive formation - only worse.

At last it happened as I predicted, though plans of privatisation of the capital underground managed to be delayed, as you can see, almost for two decades. But during that time the scheme of passing into underground was changed three times, each time to the worst.

At first they entered counters instead of coins - it became impossible to change money somewhere in the city and pass a ticket gate at once - cruise to cash desk became obligatory, i.e. time of passing ticket gate increased twice on the average.

Then counters (which were also changed twice - at first they were made of brass, then plastic ones) were replaced with magnetic cards which reading began to occupy approximately twice more time, than sinking of coins or counters.

Then shutters on ticket gates appeared - to open them is necessary to spend some time. The result is all the same - you pay and pass in the underground. But now, after interference of "invisible hand of the market", it takes from you 5-6 times more time, than it use to be before.

Well, now we have - privatisation, expectation of some investors.

Natalya Morozova recently wrote who investor is - it's a mister, wishing to buy five-copeck coins for a penny. That is to invest own not known what way earned money to receive even more.

Where will subway get money to cover to "investors" their investment and to give profit in addition? It's clear - we will bring them money, we - passengers.

Why should we pay not only for usage of underground but also added value to some "investors"? Just for a journey in underground. We won't be suggested anything new. That is privatisation and attraction of investors has one simple synonym - fare increase.

At that fare in Moscow subway is the highest in CIS without it. They pay in Kiev subway 2 times less for the same, recently the fare was four times less.

Now let's look at it a bit widely - just recently all country has discussed report of Kirichenko-Inozemtsev that in conditions of crisis inefficient enterprises should be nationalized for debts.

Just talked and what of it? Nothing, except new plans of scale privatisation. Actually, I told the same hot on the heels - report is a good thing but there's in the plans of the government annual plan of privatization, while there's no plans of nationalisation and it's not expected.

How do you think, who and on what money today, in crisis, would begin privatisation seemingly unprofitable SUE: "Moscow Metro", "Mosgortrans", "Mosvodokanal" and "Moscow Gas"?

I will tell you - the same who manage them now. Moscow officials - do you recollect as it was in film, "it is our cow and we milk it". Keep in mind: "cow" it's not SUE. SUE - automatic milker and "cow" are we, townspeople, consumers of these exclusive services of SUE.

Have you forgotten that all these are city monopolies? Well, recollect then, may be somewhere somebody dug for you alternative subway? Stretched alternative pipes of waterpipe or gas?

Permanent mayor Luzhkov will at last give way to someone - no sedition, simply there is such fact: people are not eternal. His place can be occupied by a person not from the capital nomenclature. Repartition will begin.

What could be opposed to it? Certainly "the sacred property right", that is privatisation of city infrastructure. Roughly speaking, Luzhkov's clan from the "owner" of the city in commas will turn to the owner without them. Crisis for this business - is very convenient time. Fixed capital becomes cheaper, money saved up for many years of board can be easily converted into "eternal" actives.

By the way, it's not Moscow know-how. They started talking also about privatisation of state monopolies of federal scale. There, of course, fellows from Petersburg have the first hand. They entered boards of directors of the largest state companies using feudal right of "status rent" not for nothing. The society does not know what bosses of the country received on the basis of "status rent". We have only fragmentary data, like info about bonus in 1,5 billion of far not the most prominent representative of "elite", the governor of the Samara region Artjakov. Well, it's frightful to think what president Dmitry Medvedev being vice-premier and occupying "under the status" post of the chairman of board of "Gazprom" received.

Obviously these bonuses will go on a new coil of privatisation.

Аnatoly Baranov

 

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