September 17, 2009 / 2:02 PM / 8 years ago

UPDATE 2-Ukraine president moves to halt chemical plant sale

* Yushchenko move seems aimed at rival, PM Tymoshenko

* Tymoshenko says auction will still go ahead

* Government hoped sale would boost revenue by $500 mln

By Yuri Kulikov

KIEV, Sept 17 (Reuters) - Ukrainian President Viktor Yushchenko on Thursday moved to block the privatisation of a Black Sea chemical plant in what analysts said was a clear act to spite his rival, Prime Minister Yulia Tymoshenko.

A decree from Yushchenko’s office said he took the decision to suspend privatisation of the Odessa Port plant, which the government hoped would bring at least $500 million into depleted state coffers, because of national security concerns.

But analysts and opponents saw the decision as a clear move by Yushchenko to stymie Tymoshenko, a rival who is far more popular in the country and is a front-runner in the race to succeed him in a Jan. 17 election.

Yushchenko and Tymoshenko were allies in a pro-Western revolution in Ukraine in 2004 but quickly fell out and are now fierce rivals for authority in the country.

Tymoshenko has high ratings and good chances in the January election while Yushchenko, whose current ratings are low, appears to have little chance of re-election.

“This (suspension move) is a continuation of the confrontation between Yushchenko and Tymoshenko ... In these conditions the (state property) fund can not hold the Sept. 29 auction. It seems to me that the sale will not take place before the presidential election,” Agshin Mizazade, analyst for Foyil Securities, told Reuters.

But Tymoshenko herself said Yushchenko’s move would not stop the auction, in which a Norwegian, Polish and Libyan consortium has expressed an interest.

“I want to firmly say that since the privatisation decision was taken by the state property fund it (the sale) remains within the time lines defined by the fund and nothing can obstruct this,” she said in a statement.

First Deputy Prime Minister Oleksander Turchinov described Yushchenko’s move as a “blow to the authority and prestige of our country”.

“It goes without saying that it is an attempt to undermine the budget process for this year,” he told a news conference.

BIGGEST 2009 SALE

The planned privatisation of Odessa Port fertiliser plant is by far the biggest such sale in Ukraine for 2009.

Holding out the promise of a revenue of $500 million, it seems a gift for the ex-Soviet state which has been hit hard by the recession and is drawing on a $16.4 billion International Monetary Fund bail-out programme.

Yushchenko has twice banned the Odessa plant’s privatisation on grounds of national security. He has also previously said there were antitrust reasons for banning the sale, namely that the new owners of the plant would be able to monopolise an export terminal also belonging to the factory.

Norwegian fertiliser giant, Yara International (YAR.OL) said earlier this week it and partners from Poland and Libya had submitted documents to bid for the plant.

Yushchenko, in another swipe at Tymoshenko earlier on Thursday, said he was disappointed with the leniency that international financial institutions had shown to her government.

“Populism and politicising have replaced the reforms that Ukraine should have carried out under the supervision of international financial institutions,” he told a forum of academics and analysts debating Ukraine’s economic situation. (Writing by Richard Balmforth; editing by Simon Jessop) (Kiev bureau; tel: +380 44 244 9150; RM: richard.balmforth.reuters.com@reuters.net)

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