Ukraine To Auction Off Chemical Plant

KIEV, Ukraine (AP) -- Ukraine's cash-strapped government began final preparations Tuesday to sell a key chemical plant despite a presidential order banning the sale.

The State Property Fund said it began examining bids from one Russian and two Ukrainian companies to buy the Odessa Port chemical plant, which specializes in ammonium production, at a Sep. 29 auction.

The government has set the starting price at 4 billion hryvna ($470 million; euro319 million).

Prime Minister Yulia Tymoshenko's attempts to sell off the plant have been hampered by a paralyzing tug-of-war with her bitter political rival, President Viktor Yushchenko. Both are expected to compete in the January 17 presidential election and have recently sought to undermine each other's policies.

Last week, Yushchenko issued a decree barring the sale, saying the plant was the country's strategic asset and that Ukraine was not ready to sell it without first conducting wide-ranging economic reforms.

But Nina Yavorskaya, spokeswoman for the State Property Fund, said the auction would still take place next Tuesday because the fund considered Yushchenko's decree as not yet having entered legal force.

"Today there are no legal obstacles that would prevent the auction from taking place," Yavorskaya told The Associated Press.

Tymoshenko said she was confident the tender will go forward.

"I am convinced that the privatization will be held in due course," she was quoted as saying by the Interfax news agency as saying. "Everything will be fine."

Yushchenko's office declined comment.

Analysts say the political wrangling between Yushchenko and Tymoshenko is likely to spook investors and decrease the value of the plant. Some experts also say the government should have waited until next year, when chemicals prices are expected to rise, boosting the plant's value.

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