| One of the most far-reaching restructuring programmes supported by the World Bank is that in the Russian coal sector where by 2001, more than 75% of Russia’s coal is produced from private sector operations (compared with 0% in 1993 when the restructuring programme started). The remaining 25% of production is from companies that are classified as “hard to privatise” due to restricted markets, technical problems, or remote locations. The Bank is supporting a programme focussing on these difficult operations designed to maximise their attractiveness prior to privatisation scheduled for 2002/03.
WYG International consultants advised on the restructuring of Intaugol – a loss-making group of mines located in the Komi Republic, close to the Arctic Circle. The team’s first task was to review the restructuring programme prepared by Intaugol. Independent market studies were undertaken, Intaugol’s technical and financial assumptions were reviewed and in a series of discussions with the company, a revised short and medium term programme for restructuring was agreed. This involved separating non-core activities, concentrating production from the most promising areas, minimising capital requirements, limiting expenditures only to essential activities with a fast pay-back and strengthening management and financial controls.
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