Belarus president okays one-year respite for defaulting investors

Punitive sanctions should be put on hold for one year for a number of investors, who have not been able to finish construction projects on time due to objective reasons. Belarus President Alexander Lukashenko backed the relevant proposal as he heard out a report from Minsk Oblast Governor Semyon Shapiro on 15 June, BelTA has learned.

Alexander Lukashenko said: "I am ready to look into the violation of construction contracts by investors. But I don't want us to make a habit of dropping sanctions for defaulted obligations. Because we would once again get a massive amount of unfinished construction like that. If they promise something, they'd better stay on schedule. But if objective reasons are at play, then we should definitely support investors, particularly now."

Semyon Shapiro explained that a large number of unfinished investment construction projects were registered in Minsk Oblast several years ago. The authorities are supposed to terminate such contracts if construction is not finished on time while the investor is supposed to pay for all the used privileges and preferential customs duties. "We chose a different path in order not to crush investors. We asked the head of state to allow postponing deadlines in exchange for fines. In this period we've collected Br42 billion in fines. The money has been spent to restore the oblast clinical hospital in Borovlyany," said the Governor.

In his words, the approach was more profitable for private companies than the termination of contracts and the payment of all the cancellation penalties. "Today I asked the head of state to postpone fines for a year taking into account the complicated conditions that private companies operate in for the sake of getting the investors to finish their construction projects within one year without paying fines. But if they fail to finish construction within one year, they will also have to pay the fines due this year," added the Minsk Oblast Governor.

"The respite will apply to 20-30 investors," explained the Minsk Oblast Governor. "Belarusians want to live in a clean and neat environment. They don't like living next to a never ending construction project. This is why spurring the businessmen to finish the construction they have started is the idea."

Semyon Shapiro noted that the head of state had backed the proposal.

Another matter concerning the failure of investors to honor their commitments was mentioned during the meeting. Alexander Lukashenko told Semyon Shapiro: "In the past we handed over business assets to investors such as agricultural enterprises. Some projects did not pan out. Now after buying the assets for a cheap price the investors are starting to resell them at triple prices, at the so-called market price. In addition to suppressing this practice we need to take measures to reacquire everything. I absolutely support you on this."

While talking to mass media, the Governor noted that over ten years ago about 125 enterprises in Minsk Oblast were handed over to investors, including state ones and private companies. "Unfortunately, some private companies did not pay due attention to the agricultural enterprises. Instead they started draining the enterprises for money, selling unfinished construction, some other territories," stated the Minsk Oblast Governor. "These agricultural enterprises are now bankrupt. Fortunately, there are only 5-6 enterprises that ended up like that."

"It seems to me that after today's report to the President a document will be adopted to recover everything taken from these enterprises, everything resold at market prices. Because the investors have just drained all the blood from the enterprises. Even cattle have been sold. We need to put things in order. We need to take care of people, who need a proper life and employment," stressed Semyon Shapiro.

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