Uzbekistan’s President Shavkat Mirziyoyev has raised concerns over the increasing costs at the country’s strategic enterprises during a meeting held on July 21. Notably, the Navoi Mining and Metallurgy Combinat (NGMK) reported an 8.2% rise in the cost of producing one ounce of gold, with overall expenses soaring by 22%, amounting to 6.2 trillion sums. The President highlighted that the previous reporting method, which focused on percentage reductions in total costs, did not accurately reflect the true state of affairs. A detailed analysis of production costs revealed the stark reality of rising expenses across various sectors.
In addition to gold production, the Uzbek Metallurgical Plant saw a 5.4% increase in the cost of producing steel balls, while the cost of urea production at Uzkimyosanoat rose by 11.1%, and ammonium nitrate by 8.3%. The President’s remarks underscore the need for a more transparent and realistic assessment of operational costs within state-owned enterprises, especially as Uzbekistan prepares for the initial public offerings (IPOs) of several major companies.
Consultants from Franklin Templeton, who are analysing the performance of 13 large state-owned companies, indicated that Uzbekistan Airways is missing out on approximately $120 million in revenue due to an unoptimised route network, long intervals between flights, frequent delays, and a lack of competition in onboard catering and maintenance services. Furthermore, they assessed the potential market value growth for several state companies, estimating that the value of Regional Electric Networks could double, Uzbekistan Airways could increase by 40%, and Uztelecom by 50%. Franklin Templeton, which manages the National Investment Fund of Uzbekistan, has previously evaluated the airline’s operations and proposed a transformation programme comprising 115 initiatives aimed at boosting its market value from $1.6 billion to $2.3 billion by 2025.
